Member Login

IRS Letter 6042C: Protect Clients Against Identity Theft

Tax Resolution Software

The IRS has a message for tax preparers. They recently shared a concern about a rise in identity theft attempts against employers. The IRS is so concerned, in fact, that it is issuing advice directly to business owners.

Don’t expect your clients to find out about this on their own. Many won’t. Step up and warn them as soon as possible to be on the lookout to protect their businesses against contemporary methods being used to commit tax fraud.

Identity theft is nothing new. It’s been around in various forms on both the personal and professional levels for decades, and those targeted can expect a huge challenge to repair the damage. It takes a tremendous amount of work. In some cases it’s impossible.


How Do These Sneaky Thieves Steal Identities?

With all the checks and balances in place, how are thieves still getting away with identity theft? Good question. It’s not such a big surprise when you consider all the savvy technical advances over the last ten years. Modern-day thieves have sophisticated tools at their fingertips. Between their sneaky methods and victim negligence, identity theft is still a major issue for millions.

A 2018 online survey by The Harris Poll found that nearly 60 million Americans have been affected by identity theft. Almost 15 million people experienced identity theft in 2017.


Your Client Could Be the Next Victim

Do your clients know how truly vulnerable they are? Not just your individual clients, but also your business clients? Some don’t have a clue.

Every day, more criminals find their way to company names and under-protected EINs and use them to file fraudulent returns.

One way they do it is by creating fake W-2 Forms and filing fraudulent individual tax returns with stolen Employer Identification Numbers (EINs).

And guess what? They’ve also used EINs to obtain credit cards or open new lines of credit.


Increase in Fraudulent Filings

Fraudulent filings are increasing, and forms 1120, 1120S and 1041, as well as Schedule K-1, are being targeted.

Are There Any Red Flags?  

There are always red flags. Take steps immediately if:

  • Client receives 5263C or 6042C letters
  • Extension to file request is rejected because a return with the EIN or Social Security number (SSN) is already on file
  • An e-filed return is rejected because a duplicate EIN/SSN is already on file
  • An unexpected tax transcript or IRS notice that doesn’t correspond to anything the legitimate filer submitted
  • Failure to receive expected and routine correspondence from the IRS (because the thief has changed the real taxpayer address)


The First Line of Defense

Awareness is critical if taxpayers are going to protect themselves. The first line of defense is caution. Remind your clients of the importance of reviewing their passwords. Teach them how to assign and store their passwords to keep them safe.

The IRS and members of the tax industry are also doing their part to help fight identity theft. The IRS is comparing specific data points from individual and business tax returns to identify suspicious filings by asking for additional information to help verify the legitimacy of tax returns.

You can help by advising your clients to contact the IRS when fraud is suspected. As liaison you can contact the IRS on their behalf. By the way, this is a service you can offer and be paid for.



Members Only Benefits
IRS Solutions Software gives you the confidence to provide services you may have been uncomfortable with in the past. Another benefit of membership is the training you get on our monthly case study calls.

Don’t Miss Out! Sign up with IRS Solutions Software and Gain Access to These Informative Monthly Case Study Webinars on the 4th Thursday of Every Month at 10am-11am PDT.

Ready to learn more? For starters, please pick up our FREE PRICING GUIDE. Act now so you’re ready when your clients owe tax this year.

Not Sure How to Charge for Tax Resolution Services?

Grab a copy of our FREE Tax Resolution Pricing Guide today. Plus, get expert articles and updates that contain valuable info for tax pros sent straight to your inbox. Sign up below.


Become a Member Today!

You have Nothing to Lose with Our 60 Day Money Back Guarantee!

Get Started