Identity Theft

Identity Theft And Your Taxes

Did you know that your Social Security number can help an identity thief get a job, get a tax refund in your name, or get the tax refund that should be yours? The Federal Trade Commission, the nation’s consumer protection agency, cautions that thieves can use a stolen Social Security number to apply for a job or file for a tax refund under a false identity. Identity theft linked to tax return fraud is on the rise as well. Nearly 25 percent of the people who filed a complaint about identity theft to the Federal Trade Commission in 2011 said it was related to taxes or wages. That number has nearly doubled since 2008, when only 12.3 percent of identity theft complaints were related to taxes or wage theft. The FTC received nearly 280,000 complaints about identity theft in 2011 — an increase of 10 percent over the previous year.

Identity theft continues to rise. As a result of aggressive efforts to combat identity theft from 2011 through October 2014, the IRS has stopped 19 million suspicious returns and protected over $63 billion in fraudulent refunds. For 2015, the IRS will continue to increase both the number and efficiency of the identity theft data models and filters that are used to identify potentially fraudulent returns. These pre-refund filters stop the vast majority of fraudulent returns. Additionally, the IRS continues to expand its partnerships with financial institutions to identity and stop fraudulent refunds.

IRS Criminal Investigation continues its robust efforts, and in Fiscal Year 2014, the IRS initiated 1,063 identity theft-related investigations. Criminal Investigation enforcement efforts resulted in 748 sentencings as compared to 438 in FY 2013, an increase of 75 percent. Our incarceration rate rose to 87.7 percent as compared to 80.6 percent in FY 2013. The courts imposed significant jail time with the average months to serve in FY 2014 at 43 months as compared to 38 months in FY 2013 with the longest sentencing being 27 years.

How can you protect yourself from identity theft? The IRS offers these tips to all taxpayers. No matter your filing status, income, or age, you should take these precautions to avoid become a tax scam or identity theft victim:

File your return as early as possible. Scammers do too, hoping to beat you to the punch and claim your refund.
If filing electronically, be sure the computer you use is not on a public Wi-Fi network or a wireless system that could be tapped. You should be connected with an Ethernet cable. If you aren’t sure what this is, ask someone.
Don’t leave your returns on your computer. Once you’ve filed, transfer the information to a flash drive or a CD.
Make sure you protect your computer from viruses and spyware with updated protection. Run anti-spyware software regularly. returns on your computer. Once you’ve filed, transfer the information to a flash drive or a CD.
Never provide ANY personal information, especially your Social Security Number or date of birth, to anyone who has contacted you by telephone, via email or text message. Only provide this information when you have made the contact and can verify the recipient. Legitimate organizations understand that you need to be cautious and should be able to assure you of safety. If you are in doubt, don’t give anything out.
If someone else will file your tax return for you, be sure you know the individual. If your tax return will be completed and filed by a company, verify that it is a company that is recognized by the IRS to prepare and file tax returns. Each year, new companies appear just for the tax season and are not recognized by the IRS. The IRS requires tax preparation companies to apply for and be granted a Personal Tax Identification Number (PTIN). If the company you select does not have a PTIN, then it is recognized by the IRS to prepare taxes.

Identity Theft

Identity Theft And Your Taxes

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