How should an EA approach identity theft tied to old tax debt?

Question

AcadiFi · Accepted Answer

The EA should build a documented identity-theft resolution file. That file should include Form 14039 or other identity-theft submissions, copies of IRS notices, account transcripts, wage and income transcripts, refund offset records, proof of age or nonemployment during the disputed year, and a contact log. The goal is to separate the taxpayer's true account activity from fraudulent or erroneous activity.

Suppose Northpoint Tax Advocacy represents a taxpayer whose refunds are offset against a 2014 balance. The taxpayer was a minor in that year and had no employment. The EA should obtain transcripts for the disputed year, identify the income documents that created the liability, and submit identity-theft documentation through the correct IRS channel. If the delay causes economic hardship or repeated refund seizures, a Taxpayer Advocate referral may be appropriate.

EA candidates should avoid promising instant removal. Identity-theft cases can be slow because multiple IRS functions may be involved. The representative's value is persistence and organization: prove the taxpayer's identity, prove the disputed income was not theirs, and keep the case moving through documented contacts. For exam purposes, identify the taxpayer type, governing rule, required documentation, timing issue, penalty exposure, and next procedural step before choosing an answer. Practice more in our EA question bank.

How should an EA approach identity theft tied to old tax debt?

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