Take control of your identity and make sure your electronic footprint works for you.
Recently, the Wall Street Journal published an article discussing the explosion of tax-identity theft, which has ballooned to 1.1 million cases in 2011 from 51,700 in 2008. The Wall Street Journal mentioned that the Treasury Inspector General for Tax Administration reported an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion.
What is the cause of this? Taxpayers now have the option to file their taxes online and receive their refunds directly deposited into bank accounts, and this tax filing method creates all kinds of opportunities for electronic fraud.
How does this affect you? Fraudsters who have certain pieces of your data can file a tax return under your identity and receive your refund. Fraudsters look for “at-risk” identities that they can use in scale to scam refunds out of the IRS. “At risk” identities include deceased identities, identities of minors, and legitimate citizens. Fraudsters only need a valid name and social security number combination. How much time, effort and money do you think it would take you to convince the IRS that a fraudster stole your identity, filed your taxes and received your refund? Even though this trend is on the rise and the government has seen it, the onus would still be on you, to prove that you were defrauded.