Background and purpose

Identity Verification Letters are preventive notices sent when a tax agency or financial institution sees activity that looks like identity misuse. The IRS commonly sends letters such as Letter 5071C when a return or refund looks suspicious; banks and credit services send similar notices if they detect unusual logins or account-change requests. These letters aren’t punitive — they are a safety stop designed to verify identity before money or access is granted (IRS guidance on identity theft and tax records: https://www.irs.gov/privacy-disclosure/identity-theft).

How identity verification letters work — step by step

  1. Receipt: You receive a mailed letter with a notice number and specific instructions. The IRS and legitimate institutions generally use postal mail rather than unsolicited email.
  2. Confirm authenticity: Check the letter for a notice ID and use the sender’s official website (do not click links in emails or texts). For IRS letters, start at the IRS website listed above or the notice-specific page.
  3. Complete verification: The letter will tell you how to verify — usually online through a secure portal or by phone. You may be asked to provide or upload ID documents (driver’s license, Social Security card, recent tax return, IRS transcript, or bank statement).
  4. Result: Once verified, the hold is removed or the account is unlocked. If verification fails or confirms fraud, the agency will take remediation steps (freeze account, issue Identity Protection PIN, open an investigation).

What to send as proof

Common documents the IRS and banks accept include: a government photo ID, Social Security card or SSA statement, a recent tax return, IRS transcript (Get Transcript tool), and proof of address (utility bill, bank statement). Only provide documents through the method specified on the official letter — never by responding to an unexpected email or text.

Who is affected

Any taxpayer or account holder can receive a verification letter. Typical triggers include: a duplicate tax return, a return filed electronically from an unusual IP address, new direct-deposit instructions, or suspicious account-access attempts. Business owners, retirees, and wage earners are all potential targets.

Practical examples and outcomes

In my experience managing fraud cases, clients who respond immediately to an IRS verification letter often avoid delays to refunds and prevent stolen returns. For example, a client flagged after an unfiled-return refund attempt completed the verification online and restored normal processing without further loss.

Common mistakes to avoid

  • Treating the letter as spam: If you ignored a legitimate notice, a fraud hold or additional investigation could follow.
  • Responding to imitators: Scammers mimic IRS letters. Always confirm the contact method on the official IRS site before sharing documents. (FTC identity-theft recovery steps: https://www.ftc.gov/faq/consumer-protection/identity-theft)
  • Letting it linger: Delays can extend hold times on refunds or access.

Practical checklist — what to do when you get a letter

  1. Read the letter fully. Note the notice number and deadline.
  2. Go to the sender’s official website (typed into your browser).
  3. Complete the verification flow exactly as instructed.
  4. Save copies/screenshots of everything you submit and the confirmation.
  5. Consider extra protection: request an IRS Identity Protection PIN (IP PIN) or place fraud alerts with credit bureaus if fraud is confirmed.

Related FinHelp resources

FAQ (short)

  • How quickly should I respond? Immediately — sooner responses usually reduce delays and risk.
  • Can someone else verify for me? Generally no; verification must be completed by the person named on the notice unless a legally authorized representative submits Form 2848.
  • Is this the same as identity theft relief? Not always — a verification letter may be a protective check. If fraud is confirmed, follow the IRS and FTC recovery steps.

Final professional tips

From my 15 years working with clients on identity and tax issues: keep identity documents in a secure place, enroll in account-level protections (two-factor authentication and IP PIN where offered), and store verification confirmations with your tax records. Quick, documented action is the best defense.

Disclaimer

This article is educational only and does not constitute legal or tax advice. For case-specific guidance, contact a tax professional or the IRS directly.

Authoritative sources