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 – April 15, 2015 – TIGTA report on income tax identity theft

The April 15th deadline for the filing of federal income taxes has come and gone, but if you have become a victim of income tax identity theft this tax season, your problems have only just begun. Income tax identity theft occurs when an identity thief files an income tax return using the name and Social Security number of a legitimate taxpayer and claims a refund based generally on a counterfeit W-2.  If you discover that you are a victim of income tax identity theft this year, your problems have just started. According to a recently released report by the Treasury Inspector General for Tax Administration (TIGTA), although the IRS has made some progress in assisting the innocent victims of income tax identity theft in getting their legitimate refunds, it still takes, on average, 278 days to resolve the claim of a victim of income tax identity theft although the IRS routinely tells taxpayers that they can expect their claims to be resolved within 180 days. According to the TIGTA report, the range of time it takes the IRS to resolve an income tax identity theft victim’s account and pay the legitimate refund ranged from a commendable low of 16 days to an inexcusable high of 762 days.

TIPS

So what should you do if you are a new victim of income tax identity theft?    Filing a police report immediately is very important in order to document your claim.  Although this is the era of electronic communications, the next thing you should do is mail to the IRS a paper tax return with an attached Form 14039 Identity Theft Affidavit and the police report.  According to the IRS, this will shave an average of 54 days off the time it takes the IRS to process your claim.   Your case will then be assigned to an IRS employee to assist you with clearing your name and getting your refund. As a victim of identity theft, you also are eligible to receive an Identity Protection Personal Identification Number (IP PIN) to use for future income tax returns to protect you from becoming a victim again of income tax identity theft.  You also should put a credit freeze on your credit report because if someone is able to file an income tax return on your behalf, they have access to your Social Security number which they could also use to access your credit report and obtain credit in your name.  Putting a credit freeze on your credit report will thwart future attempts by an identity thief to access your credit.  You can find information about credit freezes and how to put one on your credit reports at Experian, Equifax and Transunion by going to the Archives section of Scamicide.