Identification Theft Resources and Tax Information
In light of the S.C. Department of Revenue security breach and other information breaches that have become an almost-weekly part of our news reports, we all recognize identity theft as a real concern for us individually, and our businesses. Should this concern become a reality, we have compiled a list of resources to assist you.
Other than credit monitoring, there has been very little information provided on how to reduce identification theft. The South Carolina Association of Certified Public Accountants has contacted federal and state tax authorities seeking additional information that could prove helpful to you protecting yourself and your business. Remember, this is not an all-inclusive list of actions that should be taken, nor does it imply professional advice, rather it is intended to serve as a reference guide.
Individuals need to follow the instructions provided in the ID Theft Tool Kits found on IRS.gov. There is an Identity Theft link on the home page that links to all the resources. Below are the web addresses. Please share the tool kits with others to initiate any necessary action to help protect their identity.
The IRS does not have an automatic agreement with S.C. Department of Revenue to "flag" accounts due to the breach. Form 14039 “Identity Theft Affidavit" is only an IRS ID Theft Affidavit. The IRS isn’t aware that any other agency is using this form for their purposes. If anyone knows their account has been affected or are concerned with their accounts being affected, then the Affidavit would be the appropriate form to complete to inform the IRS.
South Carolina businesses impacted by the S.C. Department of Revenue breach may call the IRS requesting a new EIN. The IRS will accommodate the request. However, it is important to note that this is not a quick process. The newly-assigned EIN and the previously assigned EIN must be merged by Submission Procession (BMF Entity). The merging of EINs is strictly a manual process, and generally takes up to four to six weeks to complete. Depending on the number of taxpayers requesting new EINs, it could take significantly longer. South Carolina business taxpayers can call 1-888-201-0189 stating they are from the State of South Carolina.
If a business decides to apply for a new EIN, they may need to take any or all of the following actions:
- The business needs to ensure they use the newly assigned EIN for all filings and payments with IRS and EFTPS (Electronic Federal Tax Payment System). Also please be aware that your EIN will be effective immediately, your other EIN will be closed and unable to be used further.
- The IRS encourages a business to consult with their tax professional before changing an EIN because it will impact a number of areas.
- If applicable, you will need to cancel your EFTPS enrollment with your prior EIN and supply your new EIN.
- All third party authorizations on an entities behalf will need to be updated with new EIN. Includes Form 2848 (Power of Attorney and Declaration of Representative), Form 8821 (Taxpayer Information Authorization) and/or Form 8655 (Reporting Agent Authorization).
- The newly assigned EIN needs to be provided to your financial institution for all of your outstanding accounts and any other business or other governmental agency to which you may have provided your previous EIN.
We hope this information is helpful if anyone is a victim of identification theft. Remember there haven't been any reported cases of identification theft (at the time this was written) related to the security breach but it may take years before this does happen. Also, we encourage everyone to monitor their credit, bank accounts, credit cards, loans, etc., including those of your minor children, if applicable.