The IRS and Identity Theft

Have you filed your tax return expecting a refund only to be notified by the IRS that a return was already filed in your name?  Over the past few years the number of returns filed fraudulently has skyrocketed.  Untangling the mess and getting the refund to the legitimate taxpayer can take six months or longer.

The IRS has upped its efforts to work on identity theft issues dedicating a significant number of employees to identify fraudulent tax returns and prevent the issuance of refunds. In January, federal authorities targeted 389 people in 32 states and Puerto Rico, arresting and charging suspected identity thieves.

In addition to increased staff and training, the IRS is using new fraud filtering software.  The agency also works closely with banks to ensure that refunds do not get to thieves.  Personal identification numbers are issued to victims to help in subsequent filings.  The IRS is striving to make the resolution process quicker for the identity theft victims.

What can you do to protect yourself?

•File your tax return early.

•Monitor your bank accounts regularly.

•Check your credit report at least once a year.

•Never give personal information over the phone or via e-mail unless you initiated the contact.  The IRS will never contact you by e-mail, or text, or social media. 

•Protect your Social Security number. Do not carry your card with you.  Only give the number when absolutely required.  Question why it is needed.

•Update anti-virus software, firewall, security patches and passwords.

•Avoid using unsecured wireless networks. Using your smart phone or iPad in the local coffee house for financial transactions is dangerous. When using a public computer, perhaps at the library, make sure you logoff your account and close the browser.

•Shred financial documents.

Identity theft is a lucrative business.  Protect yourself.  Revisit our blog of October 7, 2010, “Protecting Yourself from Identity Theft”.  Visit the IRS website: Identity Protection Tips.

IRS Circular 230 Disclosure

Pursuant to U.S. Treasury Department Regulations, we are now required to advise you that any federal tax advice contained in this communication, including attachments and enclosures, is not intended by the Sender or Sandra G Johnson, CPA, P.C. to constitute a covered opinion pursuant to regulation section 10.35 or to be used for the purpose of (i) avoiding tax-related penalties under Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any tax-related matters addressed herein.