Businesses are a favorite target of identity thieves. Reports often cover the theft of customer financial information, like credit cards, debit cards, and bank accounts. Perhaps less well known are scams that routinely use stolen business information—whether the business owner’s personal information or their Employer Identification Number—to file tax returns and Forms W-2. The Internal Revenue Service this week announced a new affidavit for reporting tax-related identity theft incidents that target business entities.
“The Form 14039-B, an identity theft affidavit for businesses and other entities, will make it easier for businesses, estates, trusts and tax-exempt organizations to report identity theft to the IRS,” the IRS says. “Submitting this form will enable the IRS to more quickly assist entities who are victims of identity theft. The form is publicly available on Identity Theft Central at IRS.gov/IdentityTheft under the ‘Business’ tab.”
Tax professionals are often the first to see the signs that one of their business or entity clients have been the victim of tax-related identity theft. If you see a duplicate filing rejection code the first time you submit your client’s return, that’s a massive red flag. Other reasons taxpayers should consider filing out the new affidavit include receiving notices about unfiled tax returns and W-2s, as well as surprise balance due notices.
That said, the IRS outlines two situations that do not call for filing the new Form 14039-B:
- The taxpayer never applied for an EIN but has begun receiving notices for a business in their name. INSTEAD, they should file Form 14039, Identity Theft Affidavit, under their Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN).
- The business, estate, trust or exempt organization experienced a data breach with no tax-related impact to the business entity. For example, a business reports a breach of their computer system and after thorough research of the account, there is no evidence of a fraudulent tax return or W-2s being filed.
Finally, the IRS emphasizes that the new affidavit should not be used to report individual tax-related identity theft incidents. If one of your individual clients is a victim of identity theft, use Form 14039 instead.
The Tax Place