We are all familiar with identity theft when it comes to our credit cards and bank accounts, but another type of ID theft is on the rise. Over the last two fiscal years, the federal government has sentenced 661 individuals for ID theft tax refund fraud.
According to a Treasury Inspector General for Tax Administration (TIGTA) report released in November it states that some 1.6 million Americans were victims of ID theft tax refund crimes in the first half of 2013, up from 1.2 million in all of 2012.
Tax professionals predict this tax season will be no different when it comes to victims of this type of criminal activity, which is why I wanted to email you about it today as we are all starting to prepare our returns.
Individuals who commit this type of crime usually make bogus filings early in the tax season, when most Americans have yet to file their taxes. According to the TIGTA report, scammers will typically file electronic tax forms for IRS refunds using stolen names and social security numbers. This potentially allows the theft to occur unnoticed for weeks and even months before the victim files their legitimate tax returns.
The IRS has implemented new processes to catch these illegal filings. IRS Commissioner John Koskinen recently told Congress that they are using data analytics to spot suspicious tax refunds and are screening for refunds filed from the same address.
The art of ID theft in general is constantly evolving, and tax refund fraud is one that all taxpayers should take seriously.
Member of Congress