Fraud involving the use of a deceased individual’s identity is a serious concern and can take various forms, including financial fraud, tax fraud, and identity theft. Criminals may attempt to exploit the identities of deceased individuals for personal gain.
According to the IRS, thieves steal the identities of around 800,000 deceased Americans each year. This is called “ghosting” Criminals may use a deceased person’s personal information, such as their Social Security Number (SSN), to open credit accounts, apply for loans, or engage in other fraudulent financial activities, such as filing fraudulent tax returns claiming thousands of dollars in bogus refunds.
To prevent identity theft and filing of fraudulent tax returns, the Internal Revenue Service developed an indicator to lock the accounts of millions of taxpayers whom the agency assumed had died. The IRS receives information about deceased individuals from the Social Security Administration and updates their records accordingly.
A report released August 7, 2023 by he Treasury Inspector General for Tax Administration stated “ Our analysis of tax account information through January 1, 2022, identified 77,868 taxpayers with potentially erroneous deceased account locks. In these instances, the Social Security Administration’s (SSA) data did not indicate that the taxpayer was deceased, i.e., there was no date of death present. Further analysis determined that the deceased account locks were input because of the filing of a return or other actions taken by the IRS.”
The IRS confirmed that 20,222 tax payers had been erroneously identified as deceased.
What to do if the IRS tells you that you are dead?
The IRS sends a Notice (Notice CP01H) when it receives a tax return with a Social Security number (SSN) for an account that had been identified as belonging to a deceased individual, as previously identified by the Social Security Administration.
Their recommendation: Call the Social Security Administration. (See the IRS website for more information at https://bit.ly/3YX0YjG)
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