Richard Goldstein Richard Goldstein
This week I’m writing on what I view to be a very important topic: identity theft.

The last two years I’ve seen more personal income tax returns rejected as “already filed” than in my entire career. So what’s the cause? In my view, the cause is the ease of stealing information over the internet and the ability to hack into computers.

According to the Federal Trade Commission, as many as 10 million Americans have identities stolen each year. According to the FTC, 50 percent of the complaints were tax related. One of the best ways for individuals to proactively recognize that they have a potential identity theft situation is to request and review copies of their (1) tax account transcripts from the IRS, (2) wage and income transcripts form the IRS, and (3) credit reports form the three major credit reporting agencies.

Here are some other ways I call the “Goldstein” identity audit program. Daily or at least once a week review all your bank statements; daily or at least once a week review all your credit card statements; at least once a year review your credit report from all the major credit reporting agencies.

IRS transcripts

IRS transcripts can show signs of identity theft and should be reviewed. They are available for free on the “Get Transcript” web page at www.irs.gov, by calling 800/908-9946 to receive the transcript by mail, or by submitting Form 4506-T.

For identity theft purposes, some important codes are TC 150, which indicates that a tax return was filed and posted to your account, and TC 976, which indicates that a duplicate return was filed and posted to your account.

Credit reports

You have a right to obtain a free copy of your credit report every 12 months for each of the primary reporting companies. Do this now! Some issues to watch out for:

• Do any inactive accounts show new activity?

• Is there a line of credit that you did not open or that looks unfamiliar?

• Is there an account unfamiliar, or an account you recognize but did not think was overdue, delinquent or in collections?

• Are there inquiries from creditors (“hard inquiries") that you do not recognize?

There is much more to identity theft than outlined here. You can get the credit reports at www.annualcreditreport.com or by calling 877/322-8228.

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Richard Goldstein is a partner at Buchbinder Tunick & Company LLP, New York, Certified Public Accountants.