There’s a relatively new scam in town that’s been picking up speed like a bullet train and you might already be a victim. This scam involves identity thieves using your information to file electronic returns with the IRS claiming refunds, some much higher than you would be entitled to, and pocketing the funds before you have had a chance to file your tax return. The U.S. Government Accountability Office (GAO) states that there was a 62% increase in this crime from 2011 to 2012.
The IRS is changing one of its rules after a woman from Strafford became the victim of an income tax scam. While coming to grips with the death of her daughter last year, things got worse for Lori Weeks when she tried to file her tax return.
“It was a kick in the gut,” Weeks said. “It was grief on top of grief.”
A month after her 7-year-old daughter, Madison, was killed in a car crash, Weeks and her husband were filing their tax return when they learned that someone had claimed their deceased child as a dependent….
Tim Loo learned early this year that his name and Social Security number had made their way onto a fraudulent tax return, and immediately wondered whether the identity thief might also have his bank-account details or his kids’ Social Security numbers.
To survey the extent of the damage, Loo asked the Internal Revenue Service for a copy of the bogus return. It refused. TurboTax, whose tax-filing software the criminals had used, told him they couldn’t share the fake return with him either, for “privacy reasons.”
The Boston-based physician wondered: Whose privacy?
We are almost at the end of tax season. Returns have been filed, refunds are rolling in and we can look forward to not doing this again until January.
Unfortunately for some people, the headache doesn’t end once the paperwork is sent off. Many receive letters indicating that their return has been ejected as a “duplicate” because the filer’s Social Security number had already been used to file a 2014 return, for which a refund was issued.
Tax fraud relating to identity theft is one of the many scams that the IRS is forced to battle each year. Thieves don’t get your exact tax refund. Instead, they create a return that generates a generous sum of cash….
Heaven forbid if some maggot steals your Social Security number and then gets a tax refund by filing a return using your number. Of course….
The IRS met with big players in the tax preparation industry, including tax software firms, to come up with a plan to stop tax fraud, The Wall Street Journal reported….
Critics said Intuit and other tax software providers have a responsibility to protect the integrity of the tax filing system. And several security experts said the company is only now adding security measures that have been used by e-mail and social-media companies for years.
“They can’t blame everything on the IRS. That’s ridiculous,” said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group….
Just how bad is the tax ID theft problem? About half of all filers seeking refunds in Ohio now must answer a series of challenge questions just to prove they are who they say they are. Ohio has already intercepted nearly 60,000 returns seeking an astonishing $250 million, so its tax department felt the need to do “something.” The problem is that something might not help.
“These questions are hard for legit users to answer and easy for some criminals who have stolen personal data….”