Sensitive Personal Information - IRS Form 1041

[clearbluesky]

Jurisdiction

Florida

My mother is in a group of beneficiaries in a deceased person's Revocable Living Trust. She has been receiving letters from the lawyer handling the will explaining the steps required to "receive a portion of the Trust proceeds when it is liquidated". In the most recent letter, the lawyer stated that the CPA handling the tax return for the Trust, requires NAME, ADDRESS, and SOCIAL SECURITY NUMBER. This information is required by the CPA to complete IRS Tax Form 1041. I have tried to understand this situation by researching the Internet. My best guess, this information might be required for Schedule K1. In researching this topic, I also investigated the possibility of identity thief by complying with the lawyer's request for my mother's personal information, and it is well documented on the internet that identity thieves are using IRS tax forms to steal peoples identities using information provided to complete IRS tax forms. This worries me greatly!

Would it be acceptable to provide my mother's Social Security number in the form of XXX-XX-XXXX with the last 4 digits being her assign SS number (example: XXX-XX-1234)?

The taxing authorities can easily figure out her complete SS number by matching up her name, address, and the last 4 digits of her SS number.

How can I handling providing this extremely sensitive information, in the safest way possible???

Is the only answer, to provide this information, and freeze her credit???

I am thinking of contacting the lawyer, and ask what my mother would receive as a beneficiary, and weighting that information against the risk of identity thief, to determine if it is even worth the risk at all, as I think this information will pass through a lot of hands on the way to the CPA office.

To the lawyer's credit, he in fact, apologizes for having to ask for this sensitive information, but, states he has no choice but do so.

 

[Zigner]

If your mother is concerned about the necessity for this, then your mother should seek professional advice.

 

[Tax Counsel]

My best guess, this information might be required for Schedule K1.

Correct.

In researching this topic, I also investigated the possibility of identity thief by complying with the lawyer's request for my mother's personal information, and it is well documented on the internet that identity thieves are using IRS tax forms to steal peoples identities using information provided to complete IRS tax forms. This worries me greatly!

Verify that the person is really an attorney if you have any doubts and that the letters are truly coming from that attorney — i.e. that the address and other contact information you are given is for that attorney. If the person is really an attorney and handling a trust then the risk of identity theft is very, very low. No attorney would put his license on the line and risk jail/prison time to do that.

Would it be acceptable to provide my mother's Social Security number in the form of XXX-XX-XXXX with the last 4 digits being her assign SS number (example: XXX-XX-1234)?

No. The full SSN is needed.

How can I handling providing this extremely sensitive information, in the safest way possible???

Over 3 million Forms 1041 — all with Schedule K-1s containing SSNs for beneficiaries were filed just last year alone. And yet there are no reports of any identity theft resulting from it. If the attorney is legitimate then you are very much over worrying about this.

Is the only answer, to provide this information, and freeze her credit???

I don't think freezing her credit is needed for this.

... as I think this information will pass through a lot of hands on the way to the CPA office.

Unlikely. I'm a tax attorney but I don't typically prepare returns for clients. I refer that to CPAs instead as CPAs charge less for that work than I would. I provide the information needed to directly to the CPA. The CPA is, like the attorney, required to keep the client information confidential and only give it to those employees who need it to do the work of preparing and filing the return. Both attorneys and CPAs train their staffs on the need for confidentiality and, of course, screen the employees they hire to ensure they have no history of integrity issues. So the information is not going to be routed through a whole lot of people between the lawyer's office and CPA office. It'll go directly from one to the other, and both are committed to safeguarding the privacy of the client information.

 

[clearbluesky]

Tax Counsel, thank you for taking the time to reply to my post. Your information was detailed. You confirmed by understanding of making sure the letter received was from the proper address, and other identifying credentials matched up. They do. Your professional insight, and first hand experience has had a calming effect. Again, thank you very much. I greatly appreciate you taking the time to compose a post in the manner in which you did. You answered my questions. Thank You.

 

[Tax Counsel]

Tax Counsel, thank you for taking the time to reply to my post. Your information was detailed. You confirmed by understanding of making sure the letter received was from the proper address, and other identifying credentials matched up. They do. Your professional insight, and first hand experience has had a calming effect. Again, thank you very much. I greatly appreciate you taking the time to compose a post in the manner in which you did. You answered my questions. Thank You.

I appreciate the the thanks. I'm glad my information helped.