It is that time of year again when we have to start preparing for the annual tax filing. For some crooks, this time year also presents an opportunity for scamming tax filers out of their annual returns. The instances of tax return fraud through identity theft has increased dramatically this year. Because of the time of year and taxes being on everyone’s mind there are numerous articles on this currently being posted on the Internet.
Using information from a few Internet sources, Fox News, Huffington Post, ABC News, the following figures were found:
The prevalence of identity theft continues to grow with more organized crime and other entities getting involved. There are some reasons the tax return fraud has increased so dramatically, including the following:
How do I know?
Do not have a false comfort that the identity theft services such as LifeLock® will protect you from this kind of fraud, however they are looking into adding services like this in the near future. When filing Tax Returns there is not an application to credit agencies or other sources that are typically used to “trap” identity theft. This is yet another reason that criminals can take advantage of information.
You will typically not know that you have been a victim of this until you get a letter from the IRS telling you that a return has already been filed. Should you receive this letter from the IRS, it is very important that you immediately respond to it. This increases the chances that the IRS will be able to intervene, stop the fraudulent payment and possibly capture the perpetrator.
The methods of prevention for this are very similar to any identity theft prevention. The standard prevention methods are there.
File Taxes Early – Filing taxes early is one the one prevention that is specific to this fraud. If you have filed your tax return and received your refund a criminal cannot come back behind you and get your refund from you. If you have reason to believe you may have been compromised this is particularly important in order to beat the crooks. In the event you have to file an amended return it is much easier than fighting to prove you were defrauded.
If you are a victim of tax return fraud, you are not alone. This link provides a step by step guide on what a person should do if they are deemed a victim.
Sources: Fox News, Huffington Post, ABC News