Small business identity theft is a big business. Just like individuals,
businesses can be victims too. Thieves use a business’s information to file
fake tax returns or get credit cards.
Identity thieves are more sophisticated than they used to be. They know the
tax code and filing practices and how to get valuable data. The IRS has seen a
sharp increase in fraudulent business tax forms. These include Forms 1120,
1120S
and 1041,
as well as Schedule
K-1. These affect business, partnership, estate and trust filers.
Signs of Identity Theft
Business filers should be alert for signs of identity theft. They should
contact the IRS if they experience any of these issues:
- The IRS rejects an e-filed return saying it already has
one with that identification number.
- The IRS rejects an extension to file request saying it
already has a return with that identification number.
- The filer receives an unexpected tax transcript.
- The filer receives an IRS notice that doesn’t relate to
anything they submitted.
- The filer doesn’t receive expected or routine mailings
from the IRS.
New Procedures to
Protect Businesses in 2018
The IRS, state tax agencies and software providers have ways to detect
suspicious returns. However, some new measures can help validate returns in
advance. The IRS and states are asking businesses and tax professionals to help
verify if a tax return is legitimate. These procedures
are new for 2018. Software for business tax returns will ask questions related
to:
- The person authorized to sign the return
- Payment history
- Parent company information
- Past deductions
- Filing history
More information
- Identity
Protection: Prevention, Detection and Victim Assistance
- Small
Business Information Security: The Fundamentals – From the National
Institute of Standards and Technology
- Resources
for Small and Midsize Businesses – From the United States Computer
Emergency Readiness Team
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