Scam of the day – June 30, 2017 – Government agency criticizes IRS for failure to protect victims of identity theft

It was just a little over two weeks ago that I complimented the IRS for actions it was taking in regard to resolving the claims of victims of income tax identity theft as announced in a report by the Treasury Inspector General for Tax Administration (TIGTA).  Unfortunately, a newly issued TIGTA report about employment related identity theft found the IRS is doing a miserable job of protecting innocent victims of this type of fraud.

Employment related identity theft occurs when someone steals your Social Security number for purposes of getting a job.  The victim does not generally learn about the crime until they are notified by the IRS that they did not include all of their income on their income tax return.  The recent TIGTA report found that the IRS’ procedures for both identifying the phony returns filed by the identity thieves and its procedures for helping the victims whose Social Security numbers had been stolen and used  were seriously lacking.  In particular,  TIGTA concluded that 548,968 victims of this type of crime were not being properly helped by the IRS.

TIPS

TIGTA made seven specific recommendations to the IRS as to steps it should be taking, including developing procedures to notify parents of children whose Social Security numbers had been stolen and used for employment related identity theft, however, the IRS did not agree with five of the recommendations, leaving victims in danger and with less help from the IRS than they should receive.

The best thing that anyone can do to protect themselves from becoming a victim of identity theft is to keep your Social Security number as private as possible.  Don’t give it as an identifier to anyone or any company that asks for it unless you are legally required to do so.  For example, your doctor or dentist does not need your Social Security number although many ask for it.  The more places that have your Social Security number, the greater your risk of identity theft.

Scam of the day – September 7, 2016 – IRS fails to notify identity theft victims

The IRS is certainly aware of the serious problems posed by identity theft which costs taxpayers billions of dollars in phony refunds paid to identity thieves filing income tax returns with fake W-2s in order to obtain fraudulent refunds.  This makes it more startling to recently learn from a report of the Treasury Inspector General for Tax Administration (TIGTA) that between 2011 and 2015, the IRS failed to notify more than a million taxpayers who had their Social Security numbers stolen even though the IRS was fully aware that these people were victims of employment related identity theft.  Employment related identity theft occurs when someone steals another person’s Social Security number in order to get a job.  Often this occurs when illegal immigrants use stolen Social Security numbers to get a job because they cannot legitimately obtain their own Social Security number.  The IRS becomes aware of the Social Security number being misused when the income tax returns filed using the Social Security number don’t match the W-2s associated with the Social Security number.

In 2014, the IRS instituted a pilot program by which it notified 25,000 people when their Social Security numbers were used by someone else to get a job, but the program was abandoned after a short time.  In April, the IRS indicated that it would begin to notify new victims of employment related identity theft beginning in January of 2017, however, in its report, TIGTA is recommending that the IRS institute procedures to notify not only people who become victims after January of 2017, but also everyone who had become a victim of employment related identity theft previously.  TIGTA also recommended to the IRS that it notify the Social Security Administration when it becomes aware of employment related identity theft.

TIPS

While the intention of the identity thief who commits employment related identity theft is not as nefarious as that of an identity thief who commits identity theft that causes unpaid debt to be incurred in the name of the victim, the dangers of employment related identity theft can easily turn into medical identity theft whereby your medical records become corrupted by the medical records of the identity thief or criminal identity theft whereby crimes are committed in your name.  The best thing you can do to prevent any kind of identity theft is to maintain the privacy of your Social Security number as much as possible.