May 01, 2014
Area(s) of Interest: Fraud & Abuse Licensing & Regulatory Issues 

The California Medical Association (CMA) has recently become aware of a tax scam directed at physicians. CMA has received reports from physicians that fraudulent federal income tax returns have been filed using physician names, addresses and social security numbers. In many cases the fraudulent tax return includes the name of an unknown person listed as the physician's spouse. Generally, this other name is a prior patient of the physician.

 

Affected physicians are likely to learn of the scam by receiving a 5071C letter from the IRS alerting them of possible fraud. Physicians may also have received a rejection notification when attempting to electronically file their taxes. This occurs because a return has already been filed using that social security number.

 

 

If you learn that your identity has been compromised in this way, act quickly and consider the following steps.

 

 

IRS – If you have become aware that you are a victim of this scam, the IRS 5071C letter provides instructions about contacting the IRS through its identity theft website, or by phone at (800) 830-5084, to let officials know you did not file the return referred to in their letter. If you are a victim, you may not be able to electronically file your return this year, in which case you should file a paper return and attach an IRS 14039 Identity Theft Affidavit to describe what happened.

 

 

Also attach copies of any notices related to this issue that you received from the IRS, like the 5071C letter. Be sure to notify your tax preparer if this happens to you. Verify with the IRS and your tax preparer where to mail your paper tax return, based on the type of return you are filing and your geographic area.

 

 

If you have not received a notification from the IRS but believe your personal information may have been used fraudulently or are concerned about whether you may have been victimized, call the IRS Identity Protection Specialized Unit at (800) 908-4490. Additional information is available on the IRS website.

 

 

Office of the California Attorney General – Physicians affected should register the identify theft with the California Attorney General. Not only is the attorney general's website a great resource for identify theft victims, but more information about the victims of this tax scam makes it more likely that an investigation could determine the source of the scam.

 

 

FTC – File a complaint with the Federal Trade Commission (FTC). This not only helps the FTC identify patterns of abuse, but the printed version becomes your "Identity Theft Affidavit." That affidavit, along with a police report, constitutes your Identity theft report, which you will need for the IRS. The FTC also recommends several other immediate steps to take and provides relevant helpful information on its website.

 

 

Police Report – Consider filing a report with the local police in the jurisdiction where you reside. Bring with you all documentation available, including the state and federal complaints you filed. This will likely be necessary if there is financial account fraud as a result of the identity theft. However, if the only fraud is tax fraud, the police report is likely unnecessary unless specifically requested by the IRS.

 

 

Social Security Administration – Call the Social Security Administration's fraud hotline at (800) 269-0271 to report fraudulent use of your Social Security Number. In case your number is being used for fraudulent employment, you can also request your Personal Earning and Benefits Estimate Statement from the Social Security Administration website or call (800) 772-1213. Make sure to check the report for accuracy.

 

 

Additional Information – Consult the U.S. Department of Justice (DOJ) website for additional information, including checklists, about identity theft and fraud.

 

 

Financial Accounts – Physicians should also consider taking steps to protect their various financial accounts, such as running a credit report or placing a credit freeze on any existing credit cards. The FTC, AG and DOJ websites referenced above provide several suggestions on how to protect your financial interests in the event of identity theft.

 

 

CMA will continue to monitor this fraudulent tax scheme and keep physicians up to date. If you have been a victim of this scheme, and may have information to help us determine the scope of the situation, please contact the CMA Center for Legal Affairs at (800) 786-4262.

 

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