Identity theft related to tax returns is becoming a larger and larger problem as thieves identify more ways to steal information and use it to obtain tax refunds which are due to victims of the theft. The IRS is very aware of this issue and has over 3,000 employees who are actively working on identity theft cases. In addition, over 35,000 IRS employees have been trained to recognize possible instances of identity theft and assist taxpayers when it occurs.
The most frequent type of theft involving tax returns is the use of stolen identity information including social security numbers. This information is then used by the thief to file fraudulent claims requesting refunds. The victim then files his or her own legitimate tax return, only to discover the IRS has paid out a refund to someone else. The victim becomes entangled in fixing the issue and, if they have a refund due to them, will have to wait for the problem to be worked through by the IRS before their refund will be paid. This can result in significant delays.
Keep an eye on your tax information and consider that the recent Target information breach could result in an increase in tax return fraud this year. Names and financial information were some of the information gathered during the information theft.
How can you protect yourself from this kind of fraud?
- If you were one of the 70 million individuals affected by the Target fraud, use the free credit monitoring they are offering to help you keep a close watch on your accounts.
- Never carry any identification that includes your social security number or tax payer identification number. This information is too sensitive to have easily available to thieves.
- If asked for a social or tax payer ID number, be sure that it is necessary to provide it before doing so. Very few people really need that information.
- Be careful when opening emails or going to unfamiliar websites. This is one of the easiest ways to download viruses, which can grab your personal information and upload it to identity thieves. Use anti-spam and anti-virus software to catch the known issues and use common sense about opening unfamiliar emails or websites.