If you have recently received a letter from the Internal Revenue Service (IRS) that references ‘Letter 5071C’ on the top right corner of the page, you should respond to it as soon as possible.
The reason for responding as soon as possible is because this letter is issued only when the IRS puts the processing of a filed return on hold due to suspicion of identity theft. Here is a brief discussion by A.G. Tax cross-border tax professionals regarding this letter.
What Could Trigger Letter 5071C to be Sent From the IRS?
If a filed tax return raises the IRS’ suspicion with respect to the validity of the identity of the taxpayer they will issue a letter called ‘Letter 5071C’. It is advisable that the taxpayer who has received this letter follow the directions provided in the letter and respond immediately.
Please be informed that this letter will only be sent through the U.S. Postal Service and to the address mentioned on the filed tax return. If a taxpayer receives any such identification mail to an address that was not mentioned on the return, it is best to contact the IRS and confirm before proceeding with the steps listed in the letter.
How to Respond to the Letter 5071C?
This letter requires the concerned taxpayer to verify his/her identity and to confirm whether or not the have filed a return, either by calling the IRS toll-free number or visiting the IRS Identity Verification Service website (idverify.irs.gov). Due to the high volume of calls on the toll-free number, it is suggested to use the website for verification.
The webpage will use numerousquestions for which only the real taxpayer would know the correct answers to verify the taxpayer’s identity.
Some details that one could be asked to login are: date of birth, social security number/ taxpayer identification number, and information from the return filed for year 2014, such as: Adjusted Gross Income (AGI).
It is recommended that the taxpayer keep (at a minimum) copies of their prior year tax return, current year tax return, and any supporting documents, such as: Form W-2, Form 1099, Schedule A, and Schedule C with them during the call in case required.
What Happens After Verification?
Once the taxpayer’s identity is confirmed, he/she would need to confirm whether they filed the tax return in question. If the taxpayer did file the return then the IRS will proceed with the processing of the filed return (estimated to be a six week period to process and issue refund, if any), but if the the taxpayer confirms that he/she did not file the questionable return, it will be rejected.
Taxpayers, who have recently received state tax refunds, may be aware of similar identification processes, as numerous states have been using this type of system to confirm refunds.
How Do I Know IRS Contact is Not a Scam?
Taxpayers should be aware that the IRS will not request any identification or any tax-information related requests through email. They will always issue a letter by mail first followed by communication by telephone, if required. Therefore, always avoid divulging personal information on any e-mail or call requesting such information.
Lastly, keep in mind that ‘IRS.gov’ is the official website of the U.S. tax authority, and all government websites will end with the extension ‘.gov’. Not ‘.org’, ‘.net’, ‘.com’ or any other extension.
AG Tax LLP Can Help
Being informed is one of the easiest ways to avoid adverse tax situations, since it usually allows potential issues to be identified and resolved in the early stages.
If you have any tax-related queries or need assistance with tax planning or filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you with the right guidance to handle your unique tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada, and other international tax laws.
We can assist with:
• Canadian Personal and Corporate tax returns
• Cross Border Taxation and Business Planning
• U.S. Personal and Corporate Taxation
• Disclosure of Foreign Assets and other information filings
• Retirement planning
• Estate Planning, Inheritance tax advice
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.
