Identity Theft, the IRS, and You

Question: What happens when someone steals your identity and gains employment under your identity (but conveniently doesn't pay income tax)?

Answer: The IRS sends you a bill for the taxes the identity thief didn't pay.

Surprise!
That's what happened to an Chicago area 41-yr old woman. Surprise! You owe the government $22,024.40 in back taxes (to say nothing of penalties and interest). Oh, and Happy Thanksgiving!

What a (un)pleasant bit of news that must have been to receive. With the economy in a tailspin, the banking and housing sectors in complete meltdown, and inflation in food and energy up significantly; one might have been tempted to ask what else could go wrong. For the victim of identity theft, we now know the answer.

An Old Theft
According to the news report, the identity theft had actually occurred years earlier (on or before mid-2006). The accused identity thief (Rosa Flores-Velasco of nearby Elgin, IL) had purchased the identity (Name, Social Security Number, and Date of Birth) for $500 and assumed the identity for purposes of, at least, employment and obtaining a telephone account.

Flores-Velasco had additionally obtained, an additional fraud, a resident alien card with her own picture but the victim's name and information. The telephone account was also a trouble spot as it had referred to collections for non-payment.

The Anticipated Future of the Thief
Flores-Velasco has been arrested and charged with Identity Theft. Her bail has been set at $5,000 and she has been inducted into the Kane County jail. Her hearing is set for December 3rd. Her immigration status and other potential frauds relating to the identity theft are likely to be discussed then. For Rosa Flores-Velasco, her journey through the criminal justice system is just beginning.

The Anticipated Future of the Victim
Since the full details of the frauds committed by the identity thief are not yet known, it is clear that the journey of discovery, repair, and remediation has only just begun. Dealing with the consequences of identity theft can take hundreds of hours. In this case (long-term theft), the damages are likely to be both broad and deep.

Recovering your good name, dissolving fraudulent debt, restoring a valid credit worthiness score are all challenging. Dealing with government agencies like the Immigrations and Customs Service as well as the Internal Revenue Service generally do not rate very high on the list of "fun things to do".

How Merchants Helps
Merchants Information Solutions, Inc. has developed a service offering that helps folks recover from the consequences of identity theft. We have trained Recovery Advocates (RA's) that can assume much of the burden of clearing your name. The RA's can, upon execution of a limited power of attorney, act on your behalf contacting banks, credit card companies, utility providers, and other creditors where there is fraudulent debt. They can also contact government agencies (like ICE and IRS) and get things straightened out. We call this procedure our "Managed Recovery".

Of no less importance than our system of Managed Recovery, is our prevention service. Merchants' SmartIdentity program actively monitors your credit and other factors and sends you email alerts when potential trouble is spotted. We believe that prevention truly is better than cure. So when yet one more story of how identity theft has made the life of someone else very unpleasant, do more than just think about protecting yourself and your family.

Source:
- http://www.dailyherald.com/story/?id=250846