IDENTITY THEFT & TIPS TO MINIMIZE RISK
There has been a nearly five-fold increase in identity theft between 2008 and 2010. According to the head of the Treasury Inspector General for Tax Administration, "the IRS doesn't do a good job of providing assistance to victims of tax identity theft."
The most common method of identity theft occurs when a thief opens a new credit card using another person's name. But in a new surge of identity theft the thief uses someone's SSN to get a job, or fake a W2 form, files his taxes early and gets a big refund. The victim then attempts to file his return and finds out that the forms have already been submitted, locking his/her number out of the efile system, forcing him/her to paper file. Eventually the victim will be contacted by IRS regarding the "duplicate" or "fraudulent" return.
If the thief uses your SSN to get a job (as many illegal aliens do), but does not file a tax return, eventually you (the victim) will be contacted by IRS for failure to report your taxable income. In either case, the victim if left trying to clear up the mess which usually takes months to resolve.
Two new strange and frightening twists have become prevalent: stealing the social security numbers of children and of deceased individuals. In one case reported by the Criminal Investigation Division of the IRS a former Girl Scout troop leader is serving 10 years in federal prison for stealing the SSN's of girls in her troop and claiming more than $87,000 in fraudulent refunds.
Sadly, Florida is one the the areas where identity theft is growing rapidly. More than 20,000 complaints were reported in 2011 in South Florida. In many of the cases IRS sent refunds to imposters despite red flags. With a large elderly population we are ripe territory for one of the easiest ways to steal identity - information released weekly in the Death Master File which contains the name, birthdates and social security numbers of more than 90 million deceased individuals, and, admitted by SSA, some 14,000 living Americans each year reported by accident.
The Tampa area was recently in the news when Tampa Police uncovered tax party rings - events where 15 - 20 people meet and share their stollen information, file returns using Turbo Tax software, have the refunds sent to a bank account, and when the refund "drops" transfers the funds to various "gift cards" which are almost impossible to track.
The Freedom of Information Act and Privacy Laws offer the victim virtually NO PROTECTION. In fact, they actually protect the theif. Taxpayers are on their own to limit and hopefully avoid identity fraud. Here are some helpful tips:
- Be aware of red flags, such as children getting credit card offers in the mail. This may be a sign of identity theft.
- Remove personal information from your Facebook account and that of your minor children. Too much information makes it easier for thieves to steal your identity.
- Keep your personal computers safe (online shopping, banking, etc.) by using security software and smart passwords.
- Set up a netword security key or certificate for all wireless networks. Thieves can drive by and steal your information.
- Don't ever think of responding to an e-mail from the IRS. The IRS does not use e-mail for correspondence. Don't respond to unsolicited e-mails. Harmful software that records your key strokes could be attached.
- Check your credit reports. You are entitled to a fee annual report from each of the credit bureaus. Space your requests to one every four months by using one credit bureau at a time.
- Buy and use a cross-cutting paper shredder.
- Be careful what information you share. Ask yourslef, "Why are they asking for my social security number and how will they protect it if they need it?"
If you attempt to file your return and find your SSN has been compromised you will have to file your return by snail mail. We suggest mailing your return certified, return receipt requested so you have piece of mind that the IRS has received your return. Expect your refund to take months. The IRS must process this paper filing and determine whose tax return is legitimate.
Got to www.IRS.gov and download the Taxpayer Guide for Identity Theft for procedures to follow to protect yourself from further harm. The IRS reportedly has some procedures in place to handle this situation, including a special TIN which can be issued to victims in order to file tax returns in the future.