An estimated 1. 2 million tax re-
turns filed in 2007 reported wages
earned by taxpayers who used
another taxpayer’s Social Security
number, according to a new government report.
Many tax returns are filed by individuals who have used another
person’s name and Social Security
number at work, but then filed federal returns using their own names
and assigned individual taxpayer
identification numbers. This often
occurs with illegal immigrants. But
when collection actions are taken
on the account of the legitimate
holder of the Social Security number, tax complications can occur
for both the legitimate holder and
the individual who used another
person’s Social Security number.
A new report by the Treasury
Department’s Inspector General
for Tax Administration found that
the Internal Revenue Service cannot currently identify such identity
theft cases. TIGTA conducted a review when it learned that individuals using another person’s Social
Security number at work had their
wages attached by the IRS to satisfy
a tax debt associated with the tax
accounts of the legitimate holders
of the Social Security number.
ITINs are intended to provide tax
identification numbers to resident
and nonresident alien individuals,
but do not change an individual’s
TIGTA assessed whether the IRS
has procedures to effectively handle
collection issues related to ITINs.
It found that the IRS lacks internal
guidelines for its employees to fol-
low to assist either the taxpayer
whose wages are being attached or
the legitimate holder of the Social
Security number (who may be the
victim of identity theft).
TIGTA recommended that the
IRS alert taxpayers that their iden-
tity may have been compromised;
match ITIN returns with their relat-
ed reporting returns, such as Wage
and Tax Statements (Form W- 2);
and update guidelines to handle
collection issues associated with
ITINs. The IRS generally agreed
with the recommendations. AT
concerned that disclosures will in-
vite the IRS to attack the position.
The IRS says that disclosures will
cause the IRS to look at the position,
but not necessarily attack it.