Letter 4281-E Notice: Steps to Take If You Receive It

Last updated 11/01/2024 by

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Summary:

Letter 4281-E is issued by the IRS to inform taxpayers about potential identity theft involving their tax account. The letter prompts taxpayers to take action to protect their personal information and prevent unauthorized use of their Social Security number (SSN). It details steps on how to verify your identity, secure your tax account, and report any suspicious activity. Responding to the letter promptly is crucial to avoid delays in filing your tax return and securing your refund.

Receiving a notice from the IRS is never pleasant, especially if it raises concerns about identity theft. One such notice is Letter 4281-E, which is sent when the IRS suspects fraudulent activity related to your tax account. This letter serves as a warning, asking taxpayers to confirm whether or not they have been victims of identity theft. If you’ve received this letter, it’s essential to act quickly to protect your tax records and avoid any delays or complications with the IRS. In this article, we will guide you through what Letter 4281-E means, how it affects you, and the steps you need to take to resolve the situation.

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What is IRS Letter 4281-E?

Letter 4281-E is a formal notice sent by the IRS when there is a suspicion of unauthorized use of your Social Security number (SSN) or other tax-related identity theft. This letter is typically issued if the IRS detects suspicious activity such as a fraudulent tax return filed using your SSN. The goal of this letter is to alert taxpayers to potential fraud and ensure that any issues related to identity theft are addressed before processing tax returns.

The letter will often include instructions on verifying your identity to ensure the IRS can differentiate between legitimate and fraudulent activity. This helps protect you from further identity theft and ensures that the IRS processes your tax returns accurately.

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Why did I receive Letter 4281-E?

Receiving IRS Letter 4281-E means that the IRS has identified suspicious activity that may indicate identity theft. The most common triggers for this letter include:

– Multiple returns filed using your SSN: If more than one tax return is filed using your SSN, the IRS may suspect identity theft.
– Fraudulent activity linked to your SSN: If someone uses your SSN to apply for loans, credit cards, or employment, the IRS may issue this letter.
– IRS identity theft detection: The IRS uses advanced systems to detect patterns of identity theft, and this letter may be sent if those systems flag your account.

In these situations, the IRS will lock your tax account until you provide additional verification that you are the legitimate filer. This helps protect your account from further unauthorized use.

Pro tip

Always keep copies of all correspondence with the IRS, including letters like 4281-E, for your personal records. This helps you track your communication and provides evidence if needed later.

How does Letter 4281-E affect you?

Letter 4281-E affects you by temporarily freezing your tax account until the identity theft issue is resolved. This means the IRS will not process your tax return or issue any refunds until you have taken the appropriate steps to verify your identity. Here’s how this letter might impact you:

– Delay in tax return processing: If you don’t respond to the letter promptly, the IRS will delay processing your tax return, which can cause significant delays in receiving your refund.
– Potential for multiple fraudulent filings: If identity thieves are using your SSN, they may file false returns, leading to further complications with the IRS.
– Additional verification steps: You’ll need to follow specific steps to confirm your identity, which may involve submitting forms, government-issued IDs, or visiting the IRS’s identity verification website.

By responding quickly, you can minimize these effects and ensure that your tax return is processed without unnecessary delays.

Steps to take when you receive Letter 4281-E

If you receive Letter 4281-E, it’s essential to take the following steps immediately:

Read the letter carefully: Understand the reason why the IRS has issued this letter and follow any instructions provided.
Verify your identity: The letter will provide instructions on how to verify your identity, either online or by mail. You may be asked to provide personal information, such as your SSN, address, and government-issued identification.
Check your credit report: Since identity theft may extend beyond your tax account, it’s a good idea to check your credit report for any suspicious activity.
File an Identity Theft Affidavit (Form 14039): If you believe your identity has been stolen, you should file an Identity Theft Affidavit with the IRS. This helps protect your tax account and ensures that future returns are flagged for potential fraud.
Contact the IRS for assistance: If you have questions or need help, contact the IRS directly using the phone number provided in the letter.

Responding quickly is critical to resolving any issues related to identity theft and preventing further fraudulent activity.

Pro tip

If you believe your Social Security number has been compromised, consider placing a credit freeze with major credit bureaus to prevent identity thieves from opening accounts in your name.

How to respond to Letter 4281-E

Verifying your identity with the IRS

The first step in responding to Letter 4281-E is verifying your identity. The IRS offers several ways to do this:

1. Online Verification: You can visit the IRS’s Identity Verification Service online and provide the requested information to verify your identity. You may need access to your tax return from a prior year, as well as your Social Security number and other identifying details.

2. By Mail: If you prefer, you can send a written request to the IRS with a copy of Letter 4281-E, a government-issued ID, and any other requested documentation to verify your identity.

3. By Phone: In some cases, you may be able to resolve the issue by contacting the IRS directly at the phone number provided in the letter. Be sure to have your tax documents and identification ready when you call.

Filing the Identity Theft Affidavit (Form 14039)

If you suspect your identity has been stolen, the IRS advises you to file an Identity Theft Affidavit (Form 14039). This form allows you to officially notify the IRS of potential identity theft, and the agency will take additional steps to protect your tax account. Once you submit this form, the IRS will flag your account and monitor for any suspicious activity in the future.

Other actions to consider

If you believe that the identity theft extends beyond your IRS account, there are several other steps you should take to protect yourself:

– Contact the Social Security Administration (SSA): If your SSN has been compromised, it’s a good idea to notify the SSA and ensure that your records are accurate.
– Place a fraud alert or freeze on your credit: Contact the major credit bureaus (Experian, Equifax, and TransUnion) to place a fraud alert or freeze on your credit report. This will prevent unauthorized individuals from opening accounts in your name.
– File a report with the Federal Trade Commission (FTC): The FTC offers resources for victims of identity theft and can help you create a recovery plan.

Pro tip

Respond to any IRS letter promptly to avoid delays in processing your tax return or receiving refunds. The quicker you act, the faster the IRS can resolve the issue.

What to expect after responding to Letter 4281-E

Once you’ve responded to Letter 4281-E, the IRS will begin processing your case. Here’s what you can expect:

Identity verification completed: If your identity is successfully verified, the IRS will unlock your tax account, and your tax return will be processed as normal.
Additional steps for identity theft victims: If identity theft is confirmed, the IRS will take further action to protect your account, such as issuing you an Identity Protection PIN (IP PIN) to use when filing future tax returns.
Resolution timeline: The time it takes to resolve the issue can vary, but responding promptly and providing the necessary documentation can speed up the process.

If you experience delays or complications, don’t hesitate to contact the IRS or seek help from a tax professional.

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Frequently asked questions

Why did I receive IRS Letter 4281-E?

You received this letter because the IRS detected suspicious activity involving your Social Security number or tax account, which may indicate identity theft.

What should I do if my identity has been stolen?

If you suspect identity theft, file an Identity Theft Affidavit (Form 14039) with the IRS and consider placing a fraud alert or freeze on your credit report.

How long does it take to resolve the issue after responding?

The resolution process can vary, but the sooner you respond to the letter and verify your identity, the quicker the IRS can process your tax return.

Can I resolve this issue online?

Yes, in many cases, you can verify your identity online using the IRS’s Identity Verification Service. However, additional documentation may need to be mailed.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

Letter 4281-E is issued by the IRS when they suspect identity theft related to your tax account.
Take immediate action by verifying your identity with the IRS to prevent delays in processing your tax return.
Filing an Identity Theft Affidavit can help protect your tax account from further fraudulent activity.
Ignoring the letter may result in delays and could lead to further complications with the IRS.

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