What Is Form 14039?
Form 14039, titled "Identity Theft Affidavit," is a document taxpayers use to inform the Internal Revenue Service (IRS) that they have been, or may be, a victim of tax-related identity theft. This form is a critical component of tax compliance, allowing individuals to alert the Internal Revenue Service when their personal information, such as a Social Security number, has been used fraudulently to file a tax return or when they receive suspicious IRS correspondence32, 33. By submitting Form 14039, taxpayers initiate an IRS investigation to resolve issues stemming from the fraudulent activity, which could include preventing the disbursement of an illicit tax refund30, 31.
History and Origin
Tax-related identity theft has grown significantly, with the IRS reporting hundreds of thousands of taxpayers affected annually29. This form emerged as a necessary tool in response to the increasing sophistication and prevalence of criminals who use stolen identifying information to file fraudulent tax returns and claim refunds28. The IRS, in conjunction with its Security Summit partners (state tax agencies and the tax industry), has continuously worked to combat this evolving threat, introducing measures like the Identity Protection Personal Identification Number (IP PIN) program and updating protocols for reporting fraud27. The creation and refinement of Form 14039 directly addresses the need for a standardized method for victims to formally notify the IRS, thereby enabling the agency to mark affected accounts and prevent further fraudulent activity26.
Key Takeaways
- Form 14039 is used to notify the IRS of actual or potential tax-related identity theft.
- It helps the IRS initiate an investigation into fraudulent tax filings or suspicious activity associated with a taxpayer's account.
- Submission of this form is crucial when an individual cannot electronically file their own return because a fraudulent one has already been accepted using their taxpayer identification number.
- The form can also be filed preemptively if a taxpayer believes they are at risk of identity theft, even without a current tax-related issue.
- Timely submission of Form 14039 is vital for the IRS to place a marker on the account and help resolve the identity theft issue.
Interpreting Form 14039
Form 14039 itself is not "interpreted" in a numerical sense, as it is an affidavit rather than a calculation. Instead, its completion and submission inform the IRS of a specific issue. Taxpayers use the form to detail how they discovered the identity theft—for example, if they received an IRS notice about an unfiled return, could not e-file their legitimate return, or if an unauthorized return was filed using their Social Security number. 24, 25Proper completion helps the IRS understand the nature and scope of the identity theft, which is crucial for the agency to take appropriate action, such as freezing suspicious refund disbursements or initiating a deeper audit. 23The IRS relies on the accuracy of the information provided on Form 14039 to begin the process of correcting the taxpayer's account and safeguarding against future fraudulent attempts.
Hypothetical Example
Imagine Sarah attempts to e-file her annual tax return in March but receives a rejection notice stating that a return has already been filed under her Social Security number for the current tax year. Sarah has not yet filed her return. This is a clear indicator of potential tax-related identity theft.
To address this, Sarah would complete Form 14039. In Section B of the form, she would indicate that she tried to e-file but was rejected because a return had already been filed using her identifying information. She would then attach the completed Form 14039 to a paper copy of her legitimate tax return and mail it to the IRS address where she normally files. This action alerts the IRS to the fraudulent activity, prompting them to investigate the duplicate filing and work towards processing Sarah's correct return.
Practical Applications
Form 14039 is primarily applied in situations involving tax-related identity theft or significant data breach events that put taxpayer information at risk. Its practical applications include:
- Reporting Fraudulent Filings: When a taxpayer discovers that their personal information has been used to file a false return, preventing their legitimate filing.
- Responding to IRS Notices: If the IRS sends a notice indicating suspicious activity on an account, such as a notice about an unfiled return or a discrepancy in reported income that the taxpayer doesn't recognize.
- Proactive Protection: Individuals who believe they are at high risk of tax-related identity theft, perhaps due to a large-scale data breach, can file Form 14039 to proactively flag their account with the IRS for increased vigilance.
22* Dependent Identity Theft: If a dependent's Social Security number has been misused, parents or guardians can use Form 14039 to report the incident. - Supporting Investigations: The form serves as the official document to initiate an IRS investigation into tax fraud and helps the agency track and manage such cases. The IRS has made strides in preventing fraudulent refunds, successfully protecting billions of dollars in identity theft refunds in recent years.
21
Limitations and Criticisms
While Form 14039 is a crucial tool for victims of tax-related identity theft, the process of resolving these cases can be lengthy and frustrating for taxpayers. A significant criticism has been the prolonged delays in the IRS's ability to resolve identity theft victim assistance cases. Reports from independent watchdogs, such as the National Taxpayer Advocate, have highlighted that resolution times can extend for many months, with some cases taking over a year or even longer. 20This protracted timeline can cause substantial financial insecurity for victims, especially those who rely on their tax refund for daily expenses.
19
Furthermore, the form itself cannot be e-filed in all scenarios and often requires mailing or faxing, which can contribute to delays in processing and resolution. 18Taxpayers may also need to take additional steps, such as obtaining an Identity Protection PIN (IP PIN) or checking their credit report, to fully mitigate the impact of identity theft and protect against future occurrences. 16, 17Despite IRS efforts to increase resources and improve processes for consumer protection in this area, the volume and sophistication of cybersecurity threats continue to present challenges.
14, 15
Form 14039 vs. Form 1040-X
Form 14039 (Identity Theft Affidavit) and Form 1040-X (Amended U.S. Individual Income Tax Return) serve distinct purposes, though both relate to correcting issues with a tax return. The key differences lie in their initiating events and objectives.
| Feature | Form 14039 (Identity Theft Affidavit) | Form 1040-X (Amended U.S. Individual Income Tax Return) |
|---|---|---|
| Primary Purpose | To inform the IRS of actual or suspected tax-related identity theft, specifically when a fraudulent return has been filed or an account has been compromised. | To correct errors on a previously filed, legitimate tax return. |
| Initiating Event | Discovery of fraudulent tax activity (e.g., rejected e-file due to duplicate, suspicious IRS notice). | Realization of an error on one's own filed return (e.g., missed deduction, incorrect income). |
| Outcome | Triggers an IRS investigation into the fraud, places a marker on the account, and works to restore the taxpayer's legitimate tax record. | Adjusts tax liability, resulting in a potential additional refund or tax due. |
| Scope | Addresses external fraudulent actions against a taxpayer's identity. | Addresses internal errors or omissions made by the taxpayer on their own return. |
Confusion may arise because identity theft often necessitates filing a new correct return (which might be delayed or require special handling with Form 14039) or could lead to the IRS sending notices that might seem like an error on the taxpayer's part. However, Form 1040-X is exclusively for a taxpayer amending their own legitimate return, not for reporting a fraudulent return filed by someone else.
FAQs
When should I file Form 14039?
You should file Form 14039 as soon as you suspect or confirm tax-related identity theft. This includes situations where you try to e-file and your return is rejected because one has already been filed using your Social Security number, or if you receive an unexpected letter or notice from the IRS about a tax year you haven't filed for or about income you didn't earn.
12, 13
Can I file Form 14039 electronically?
Generally, Form 14039 cannot be electronically filed directly with your tax return. It must typically be printed and submitted by mail or fax, often attached to a paper-filed return if your e-file was rejected. 10, 11However, some tax software may allow you to complete the form within their program for printing, and the Federal Trade Commission's IdentityTheft.gov website can assist with generating the form as part of a recovery plan.
9
What happens after I file Form 14039?
After you file Form 14039, the IRS will place a marker on your account to indicate potential identity theft and begin an investigation. This process can take time, during which your tax return or tax refund might be delayed. 8The IRS may send you notices or request additional information to verify your identity and resolve the issue. You may also be advised to obtain an Identity Protection PIN (IP PIN) for future tax filings.
7
Do I need to include a police report with Form 14039?
While not always mandatory, it is often recommended to include a copy of a police report if you have filed one concerning the identity theft incident. 6You should also attach any IRS notices or letters you've received related to the suspected fraud, along with a copy of a government-issued identification, such as your driver's license or passport.
4, 5
How can I protect myself from tax-related identity theft in the future?
To protect against future tax-related identity theft, consider obtaining an Identity Protection PIN (IP PIN) from the IRS, which acts as a unique six-digit number known only to you and the IRS, providing an added layer of security for your tax account. 2, 3Always protect your personal information, be cautious of phishing scams, use strong passwords for online accounts, and review your credit report regularly for suspicious activity.1