Scam of the day – July 1, 2014 – Income tax identity theft update

Income tax identity theft is a huge problem and it is only getting worse.  Income tax identity theft occurs when an identity thief files a phony income tax return using the Social Security number of his or her victim.  The phony income tax return includes a counterfeit w-2 which results in a large, undeserved refund check being sent to the identity thief.  Meanwhile, the real taxpayer is delayed in obtaining their legitimate refund while the IRS slowly investigates the crime.    According to the Treasury Inspector General for Tax Administration it takes almost a year for the IRS to resolve individual claims of legitimate taxpayers.  According to the GAO in 2008 there were 47,730 recorded incidents of income tax identity theft, but that number grew to 641,690 incidents in 2012 and shows no indication of slowing down.  Florida Senator Marco Rubio has repeatedly contacted the IRS for information as to what the IRS is doing about this problem.  Income tax identity theft, particularly affecting senior citizens occurs more in Florida than in any other state.  The IRS has been slow to respond to Senator Rubio in his inquiries over the past year who is continuing to press the IRS for answers.

TIPS

Along with protecting the privacy of your Social Security number, the best thing you can do to protect yourself from income tax identity theft is to file your income tax return early.  Income tax identity thieves file before their victims do so they receive their refund before their victims have filed their legitimate returns.

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