How does tax fraud occur?
Identity thieves want your tax refund. They can steal bits of your personal information or even your prior year’s tax documents, in order to file a fraudulent tax return. The crime may be undetected until you are missing a refund check or the Internal Revenue Service notifies you of a problem.
What are the effects of tax fraud?
Not only can tax fraud thieves steal your refund check, but they can also do serious damage to your good standing with the IRS. If a fraudulent tax return is filed, your official financial information would be wrecked, and you may be facing an audit. It could take years to fix your records with the IRS. Plus, with the stolen information, identity thieves could continue committing identity crimes long after tax season.
- The IRS initiated 1,492 identity theft related criminal investigations last year, a 66 percent increase over 2012.
- Tax fraud prosecutions and indictments have more than tripled since 2011.