Tax Time for You and Party Time for the Thieves
Beware: this is when the conmen strike You carefully fill in your tax forms, divulge every little personal detail to your partner, the tax man, and someone else gets your refund. With your name and Social Security number to boot!
Identity theft The IRS is grappling with a nearly five-fold increase in taxpayer identity theft between 2008 and 2010, a Government Accountability Office official plans to tell a House hearing Thursday. There were 248,357 incidents in 2010, compared to 51,702 in 2008. That’s some increase! And according to James White, director of strategic issues for the GAO, many identity thieves don’t get prosecuted. “IRS officials told us that IRS pursues criminal investigations of suspected identity thieves in only a small number of cases,” White says in testimony prepared for a House Oversight and Government Reform subcommittee.
The problem “We want to know why this problem is getting worse,” said Rep. Todd Platts, R-Pa., chairman of the subcommittee. “By bringing these issues to the public quickly, the committee hopes to give citizens the necessary information so they can protect themselves from identity theft.”
Tax identity thieves Tax identity thieves typically submit returns for refunds early in the filing season. The legitimate taxpayer usually files later, and only then learns from the IRS that two returns were filed using the same Social Security number. Some thieves steal a name and Social Security number to obtain a job. The employer will report the thief’s wage information to the IRS, as would the legitimate taxpayer’s employer. The victim then would receive an unwelcome IRS notice that he or she failed to report everything that was earned. The victim would then need to work with the tax agency to sort things out. Shulman said the IRS can significantly increase its protection after someone has been victimized the first time.
A victim’s tale One victim plans to tell the committee about what she calls “my nightmare.” She had to make rounds of calls to the IRS and other government agencies, sometimes repeating the same information. She spoke on the phone with an IRS employee she described as “the most rude and discourteous person I have ever spoken with in my life.” She was told her refund would take 16 weeks to six months.
Identity Theft Affidavit Tax form 14039, the IRS Identity Theft Affidavit, allows the agency to mark an account to identify future questionable activity. A task force of the IRS and other agencies established a website, STOPFRAUD.gov, which tells taxpayers what to do if they suspect identity fraud. The main IRS website includes “Ten Things the IRS Wants You to Know About Identity Theft.” If the IRS receives multiple tax returns for the same individuals, the taxpayer usually must substantiate identity with a federal or state-issued identification such as a driver’s license or passport together with a copy of a police report or the IRS affidavit.
Pilot program This past January, the IRS developed a pilot program designed to lessen delays for victims who deserve a refund. Victims are issued an “identity protection personal identification number,” which the IRS will use to process future returns. A new PIN will be issued each year the taxpayer’s account has been marked for potential fraud.
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