Earlier this week the IRS acknowledged that they had paid out more than five billion dollars in fraudulent income tax refunds to identity thieves in 2011 and that a government audit of the IRS predicted that the problem will worsen over the next five years.  Despite the efforts of the IRS in detecting about 940,000 fraudulent income tax returns last year, they are not coming close to stopping the flow of fraudulent tax refunds.

TIPS

If someone steals your identity and files an income tax return before you do, your ability to get your proper income tax refund becomes much more delayed and complicated.  Consider filing early as do the identity thieves who often file before employers must file W-2 forms for their employees.  Also, guard your Social Security number as much as possible because it is the key to filing a fraudulent income tax return.  If you work with a tax preparer, check them out first to make sure that they are both honest and that they keep your personal information secure