The Internal Revenue Service says that tax identity theft continues to be a growing problem and has rolled out several initiatives to combat identity theft and tax return fraud this year.
According to the IRS, the agency has halted 19 million suspicious returns, worth more than $63 billion, since 2011. Tax identity theft generally occurs when a criminal files a fraudulent tax return using someone else’s Social Security number — in hopes of receiving a refund.
The agency says it plans to alert taxpayers if an additional return was filed in their name. While the second return filed under the same individual’s name for the same year will initially be rejected, regardless of whether the first or second return filed was the fraudulent one, the added measure will let victims of identity theft know of the problem in a timely manner.
Victims of identity theft who had a fraudulent return filed first will have to wait until their case is resolved — which typically takes about four months — before receiving their refund.
The IRS also plans to send notices to taxpayers who have unreported income, which occurs when someone steals your Social Security number and gives it to an employer to avoid being taxed on earned wages.
In addition, the IRS will continue to provide identity theft victims with a personal identification number to prove who they are when filing tax returns.
The IRS has also been warning consumers recently about phishing tax scams and fake emails. IRS imposters have been sending out phishing emails that claim that the recipient either owes money or is due a refund. However, this is used as bait to get individuals to provide Social Security numbers and other personal information. In some cases, clicking on the emails also allows criminals to infect computers with a malicious code.
The latest moves are just a continuation of an ongoing series of steps made by the IRS to combat tax identity theft. Last year, the IRS assigned more than 3,000 IRS employees to work on identity theft-related issues and to prevent refund fraud, identity theft-related crimes and help taxpayers who have been victimized by identity thieves. The IRS also provided training to more than 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.
The IRS encourages taxpayers to file as early as possible to minimize the chances of a fraudulent return reaching the agency first. The agency also says consumers should protect their computers by using firewalls and anti-virus software and only give out Social Security numbers when absolutely necessary. Furthermore, taxpayers shouldn’t carry their Social Security card or financial documents containing their SSN or Individual Taxpayer Identification Number (ITIN) on them. Instead, these documents should be stored in a safe and secure place.