Taxes and identity theft: Tax day approaches the risk increases

With just days left to file your taxes in a timely manner, law enforcement agencies across the United States are reporting an increase in tax refund identity theft.

During an interview with Hampton Police Captain Derrick Austin on WSB Radio Captain Austin reports, “The suspect’s are getting the victim’s information, filing the return as if they were that person, and then getting the refund.”   “Victims don’t know they’ve been targeted until they file their own return and get notified by the IRS that someone has already filed a return in their name.”

ABC news reports,0 “Tax-related identity theft has doubled over the past two years and now makes up the single largest category of the crime. In 2009, only 12 percent of identity theft was related to taxes. Now tax identity theft makes up 24 percent of all ID theft crimes reported to the Federal Trade Commission.”

CBS News reports . . .  “Stole identities and filed about 2,000 tax returns and received or attempted to receive about $1.8 million in fraudulent refunds,” said Special Agent Bryan Thiel with the IRS Criminal Investigation Unit. “The Federal Trade Commission says it’s now getting about 50,000 identity theft complaints a week, mostly tax refund thefts. In the end it could cost the federal government billions of dollars.”

One of the most common scams this year involved the American Opportunity Tax Credit.  The Washington Times reports, “The IRS says this is how it works: the con artist tells the taxpayer he or she can file for a tax refund based on the American Opportunity Tax Credit. This is an education credit. The scam artists falsely convinces the victim he or she can still file for the refund even if they went to school years before. They offer to help file, then get the taxpayer’s personal information, and file a bogus refund.”

Other scams are more simplified.  Identity thieves simply use your name and social security number, their address and a prepaid, reloadable debit card and fill out the paperwork, online.  Because they are filing an electronic return it is much easier to manipulate the payments and information in order to guarantee a return.  They then accept the “credit card” return that some services offer or they use their own prepaid card information that they bought using the fake name and have the tax refund credited to the card. Some have even received checks!

The main problem is that you don’t know that you have been taken advantage of until the deed is done.   When you file, you receive the notice that you have already filed for this year and all the warning bells and signs start to go off.  You now have to prove your identity, which sometimes is easier said than done. Money that you may have been counting on is no longer available to you and won’t be until the false filing is resolved.

How can you protect yourself from identity theft of your tax return?

  • protect your information
  • if you are filing your taxes on a public computer, such as the library make sure you don’t save it to the computer, are using a secure network and save your return to a flash drive so you can take it home for later reference.
  • avoid links or images that you receive in email, especially from those you don’t know. They may contain keylogger, malware or other types of virus programs that provide opportunities to steal your information.
  • Verify any phone calls, letters, or fax  from someone claiming to be with the IRS, by calling 1-800-829-1040.
  • Remember the IRS never contacts taxpayers by email.
  • File early.
  • You should always get your refund within one month of filing it electronically. Ninety percent of all refunds are issued within 21 days. You can check its status at this IRS webpage.
  • Call  the IRS at 1-800-908-4490 if you suspect or have been a victim of tax related identity theft.
  • Visit the IRS online  here  for more information about tax related identity theft and the latest scams on its website.

 

 

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