Tax Return Fraud - a "most serious problem"
Important steps you should take now to protect your tax refund
Last year, the IRS issued billions of dollars in tax refunds to identity thieves -- while victims fought six months or more to receive the money they were owed. The shocking rise in tax return fraud, the difficulties faced by victims both before and after they were able to receive their refund, and the staggering cost to the US Government led the National Taxpayer Advocate to call this a "most serious problem." For insight into the burdens the IRS currently puts on tax return fraud victims, check out the infographic
in the sidebar to the right.
While your membership in ARX-ID will give you full assistance resolving tax return identity theft, there are important steps you should take now
to help avoid becoming a victim. Read our article below for details on:
why you should file your return now
warning signs you are already a victim
why an email from the IRS puts you at high risk for fraud
how to choose a reputable tax preparer
Not sure if tax return theft is something you need to worry about? Our round-up of recent cases
might change your mind. As always, education is the key to fighting identity theft. Stay informed, and stay safe. And if identity theft strikes, ARX-ID is there to help.
Daniel J. Benish
CORE ID Services, LLC
Your Guide to Avoiding Tax Return Fraud
43.4 % of identity theft cases involved tax or wage-related fraud last year,
according to statistics compiled by the FTC. The National Taxpayer Advocate found this type of fraud placed a high burden on victims, with tax refunds being held six or more months, and full resolution sometimes taking years. Victims are also much more likely to be audited in years to come -- an attempt to detect future fraud that winds up treating the victim as the guilty party. These important steps can help you avoid the nightmare of tax return fraud.
File early. The sooner you get your return filed, the less likely an identity thief can beat you to your refund. If you have suffered the loss of a spouse or child, be sure to file those returns immediately as well.
Beware of emails from the IRS. They are "phishing" attempts to get you to provide personal information to identity thieves. The IRS never uses email to request taxpayer info. Report it by forwarding it to firstname.lastname@example.org.
Protect your Social Security Number. All tax return fraud requires your Social Security Number, so protect this information carefully.
Ask your tax preparer for their PTIN. The IRS now requires all paid tax preparers to have a Preparer Tax Identification Number. If yours does not, heed the red flag and find a reputable service.
Never sign a blank return. If your preparer asks you to do so, it is another red flag. Also know that you are responsible for whatever your preparer files - review your return and ask for a copy.
Be alert for notices of unreported income. If an identity thief used your SSN to get a job, their employer will report those earnings under your name. If the IRS does not see those earnings on your return they will notify you of unreported income. Heed this warning sign of wage-related identity theft and contact ARX-ID immediately for help.
Monitor your risk for identity theft at www.mycoreid.com. Haven't logged in yet? Do it today to get the full benefit of your ARX-ID membership. See your Welcome Kit for instructions or call 855-262-7612 for help.
In the News: Recent Tax Fraud Cases
March 2013 - Two Miami police officers are arrested
for using data from the drivers' license database to commit tax return identity theft.
February 2013 - Georgia tax preparer sentenced to jail for identity theft
, after admitting he used his position of trust as a paid tax preparer to commit fraud.
January 2013 - Prisoners rake in millions in tax return fraud schemes -
a crime wave that continues to balloon due to its relative ease.
November 2012 - Patient data stolen from Florida hospital used to commit tax return fraud.