Tax Attic

Jerry Coon

I am writing this column before the results of Tuesday’s election are known but there is one known certainty-Pete MacGregor is no longer the Michigan State Representative for the City of Rockford. In a re-structuring move, Pete’s 73rd District loses Rockford but he gains Grand Rapids Township and East Grand Rapids. Pete has been a wonderful representative for Rockford. He has met with the Rockford City Council on a variety of topics over the last two years and was always available for taxpayer input during his regular meetings at various locations. Pete is just one of those guys that you saw all around town. Thank you, Pete, for the excellent job you did of representing the City of Rockford. It’s our loss but Grand Rapids Township’s and East Grand Rapids’ gain. We are now part of the newly re-structured 74th District that includes the Cities of Walker, Grandville, and Cedar Springs; the Village of Sparta; and townships of Algoma, Solon, Alpine, Sparta, and Tyrone. I don’t believe I need a crystal ball to see that Rob VerHeulen will be our new representative. I have met Rob several times in various venues and he is similar to Pete-hard working; conservative; supports strong schools; favors local control of government; and will be accountable and accessible to us, his constituents. Welcome to Rockford, Rob. It’s nice to have you as our representative. I’m sure you will hit the ground running.

Last Wednesday, I received disturbing emails from several professional tax preparer sources indicating that the South Carolina Department of Revenue had been hacked into by intruders from a foreign internet address. The bad news is apparently 3,600,000 Social Security Numbers (SSN) and 387,000 credit and debit card numbers may have been exposed to the intruders. The only good news is only 16,000 of the card numbers were unencrypted. The extremely bad news is that none of the SSNs were encrypted. The experts say it was inevitable that some state would be compromised. It was only a matter of time and it just happened to be South Carolina. Be that as it may, the question is this: what is South Carolina going to do about losing those SSNs and card numbers? Here is its answer. First, they have advised any taxpayer who filed an individual or business tax return in any year since 1998 to immediately call South Carolina at 1-866-578-5422. South Carolina will notify the taxpayer whether or not the individual or business has been compromised. Second, if compromised, South Carolina will provide, at no charge, one year of credit monitoring and identity theft protection through Experian. The taxpayer will be enrolled immediately upon request in the Experian Identity Theft Protection program. Third, if compromised, the taxpayer should call all banks and credit card companies that issued the now compromised cards. Cancel the compromised cards and issue new ones. Fourth, compromised taxpayers should place fraud alerts and a security freeze on all financial information by calling all three credit bureaus. Equifax can be reached at 1-888-766-0008. Reach Experian at 1-888-397-3742. TransUnion’s number is 1-800-680-7289. Fifth, contact the IRS Identity Protection Specialized Unit (IPSU) at 1-800-908-4490; report the incident; and file Form 14039, Identity Theft Affidavit, with the IPSU. IPSU will then issue a personalized PIN, called an Identity Theft Indicator, (ITI) that the taxpayer must use to electronically file a tax return. The IRS will review any return filed in the next three years with the thought that the account may be compromised and the IRS may extend that three year period. If any irregularities are found, the IRS will contact the taxpayer. Sixth, South Carolina recommends that for the next two years the taxpayers should request a transcript of information reported to the IRS under the taxpayer’s SSN. No one seems to have the answer as to why South Carolina was picked on but it was inevitable that some state would be compromised. We now have the procedure that South Carolina is using. I’m sure that procedure will be analyzed for its’ effectiveness and improved upon, if necessary. Right now it seems unimaginable, but at some date in the future, I believe everyone will receive an Identity Theft Indicator that they must use in order to submit a return. A fresh ITI will be issued for each return to be submitted. The IRS will have the master list. Only the IRS will have the master list. We think Fort Knox is well-guarded. That master list will be more closely guarded than all of that gold in Fort Knox. If a return doesn’t have an ITI on it, it will automatically be considered a fake return filed by a thief. I think it will take another state or two to have all of their information “compromised” before the IRS proposes the ITI for everyone. Like I said above, I don’t have a crystal ball. I thought Detroit would win the World Series. But this one is pretty much a certainty just waiting to happen. This is Jerry Coon signing off.

 

 

 

Jerry Coon is an Enrolled Agent and a Registered

Tax Return Preparer. He owns Action Tax Service on Northland Dr in Rockford. Contact Jerry through his website at www.actiontaxservice.com

 

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