IRS Tax Tip 2017-86: Five Signs of Small Business Identity Theft, New Protection Methods

Internal Revenue Service (IRS) sent this bulletin at 12/04/2017 11:05 AM EST

IRS Tax Tips

December 4, 2017

Issue Number: IRS Tax Tip 2017-86

Inside This Issue

Five Signs of Small Business Identity Theft, New Protection Methods

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

Share this tip on social media -- #IRSTaxTip: Five Signs of Small Business Identity Theft, New Protection Methods https://go.usa.gov/xn9rh

Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the Internal Revenue Service (IRS).

IRS Tax Tip 2017-86: Five Signs of Small Business Identity Theft, New Protection Methods

Useful Links:

News Essentials

The Newsroom Topics

IRS Resources

Issue Number: IRS Tax Tip 2017-86

Inside This Issue