WAXAHACHIE — Identity theft tax-refund fraud has continued on a steady rise for the past few years. It has become one of the most popular tax scams and is a money-making scheme for criminals. If you fall victim to this scheme, you risk your tax return being delayed six months or longer, not counting the time required to convince the Internal Revenue Service (IRS) that you are who you say you are. All a criminal needs are someone’s Social Security number, date of birth and a computer or smartphone.
According to the Government Accountability Office, the IRS estimated that it mistakenly paid $5.2 billion to identity thieves in 2013. The criminals have filed fraudulent tax returns on behalf of millions of unknowing taxpayers. In a more recent report, as of March 2016, The Inspector General for Tax Administration, says the IRS had identified over 42,000 tax returns with more than $225 million claimed in fraudulent refunds. This information comes from an article located on Forbes.com titled “Startling Report of IRS Tax Refund Frauds” written by Robert W. Woods. The losses to the IRS are still in the billions of dollars, but it appears the IRS is progressing in the detection of fraudulent tax returns.
How do criminals accomplish this fraud scheme? The scheme is actually fairly easy to execute. Taxpayers usually receive a W2 tax form from their employers by the end of January. The taxpayer usually has until April 15th to file the tax return. During the time from January until April 15, the fraudsters can steal the tax payer’s personal information, submit a fraudulent tax return and collect the refund check. The IRS tries to issue refund checks within three weeks of receiving the tax returns, so the scheme happens relatively quickly for the fraudsters.
Fraudsters commonly use the stolen identity of the elderly, the deceased, welfare recipients, the disabled, incarcerated individuals and military personnel.
Identity theft is difficult to guard against completely, but there are ways to help you protect your identity, including:
Regularly check your credit report.
Properly dispose of documentation containing sensitive information.
Only give personal information when absolutely necessary.
Never use public Wi-Fi or a non-password-protected network to file your tax return electronically.
Protect personal laptops and devices by installing firewalls and the most recent anti-virus software.
File taxes as early as possible during tax season because fraudsters try to file fraudulent returns before the actual filer.
Be leery of phone calls from people who already know your Social Security number and claim to be IRS agents. Caller ID can be manipulated to appear the IRS is calling.
For more information, contact Detective Kyle Ranton with the Waxahachie Police Department if you receive notice from the IRS or if you suspect that someone has filed a fraudulent return on your behalf. It is imperative that you respond immediately by submitting the IRS Identity Theft Affidavit, Form 14039. Detective Ranton can be reached at 469-309-4410 or firstname.lastname@example.org.