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Daughter's SSN taken by Aunt without permission, now she owes back taxes

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kfowler57

Member
Missouri

My husband's first wife died 12 years ago. Apparently, at that time, the aunt got a hold of his daughter's SSN and has been using it as a tax ID in the stock market. We knew nothing about this until she turned 18 and received a letter telling her she owed back taxes for the year 2002 (she was 12) when this aunt sold $22,000 of stock and put the money in an UTMA. The IRS is investigating but it is taking forever and, in the meantime, my daughter supposedly has an UTMA which is prohibiting her from getting a student loan. The aunt refuses to speak to us or share any information The little info we do have is from the IRS when we visited them after my (step)daughter receiving their collection letter. The financial institution also refuses to speak to us since we aren't the custodians. The aunt is in Kansas, we are in Missouri. The financial institution is in California.

Shouldn't it be illegal for anybody to use somebody's child's SSN to do any kind of financial wheeling and dealing without the parent's permission? If the money really does go to our daughter in three years, we're okay with that, but we wonder if it's just a ruse for them to avoid taxes and the money will disappear before her 21st birthday, considering what I've read on UTMAs. We don't even have a clue how much is in there, or if withdrawals have been made. The financial institution refuses to even send our now 18 year daughter copies of statements. All the lawyers we talk to tell us they've never dealt with something like this and don't know where to begin. Now our daughter owes approximately $4500 in back taxes, penalties and interest and it keeps going up . Thanks! Oh, and our daughter has never lived with anybody other than her father who has been her guardian since her birth. This aunt never has had any kind of legal custody of her.
 
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abezon

Senior Member
File a complaint with the attorneys general for all 3 states involved for identity theft. Then sue the aunt for the theft (exerting unauthorized control over daughter's money) or fraud in the alternative (using daughter's SSN on her own brokerage account). The judge has the power to subpoena the financial institution's records & force the aunt to disclose info.

For the IRS, deny that the income is the daughter's. Try getting the Taxpayer Advocate's office involved. You might also request that your representative/senator get involved. This puts your daughter's case into 'controlled correspondence' at the IRS & makes sure things don't get lost for 6 months at a time.
 

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