Recently, an Ohio woman, Ghana Johnson was indicted on federal charges related to income tax identity theft in which she is accused of filing 106 phony income tax returns and claiming $476,000 in phony refunds using stolen Social Security numbers and falsified W-2s and other income records. She is accused of obtaining the Social Security numbers and other personal information primarily through stealing the admission records from a medical and dental assistant school in Cleveland as well as through holding herself out as a legitimate tax preparer and thereby gaining information from family members, friends and others who she cheated.
With the start of the year, income tax identity theft will shortly be in full swing because income tax identity thieves rush to file phony returns before the legitimate taxpayers whose information they have stolen file their own legitimate returns. It is for this reason that the earlier you file, the safer you will be from income tax identity theft. Income tax identity theft is a multi-billion dollar crime that is only getting worse and due to IRS budget cuts and failure to enact sufficient security measures can be expected to be worse this year. Things you can learn from this particular case are to limit, as much as possible, the places that hold your personal information, particularly your Social Security number and make sure that any tax preparer you use is legitimate.