Tax Identity Theft Isn’t Limited to Individual Returns

The Internal Revenue Service issued a bulletin in December 2017 warning small businesses to be vigilant against a growing number of tax identity thefts against employers.

It was noted that the IRS saw a large increase in the number of fraudulent forms 1120, 1120S and 1041 as well as Schedules K-1, as well as partnership, estate and trust returns.

In the past, identity thieves were using stolen Employer Identification Numbers (EINs) to create fake W-2 forms that they use to when filing false individual returns and using the EINs to open lines of credit or obtain credit cards.  Now they are using company names and EINs to file fraudulent business returns.

To help combat the thieves, starting in 2018, the IRS is now asking business and tax practitioners to provide additional information such as:

  • Name and SSN of the person authorized to sign the corporate return;
  • Payment history of estimated tax payments, how they were made, and the amount paid;
  • To list if there is a parent company and the name;
  • Give additional information based on the deductions claimed; and
  • Business filing history — listing any other business related tax forms filed.
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