As April 15 quickly approaches and Americans start to file tax returns, a large number of people will be in for a shock.
And it’s not a bigger-than-expected refund.
Many will learn their taxes have already been filed – by someone else using their identity.
Identity theft and tax fraud are on the rise in 2016, with an increasing number of fraudulent tax filings to the Internal Revenue Service through such popular online programs as TurboTax, H&R Block, and eFile. Con artists use information such as Social Security numbers to file taxes and get a job falsely – resulting in the IRS having inaccurate taxpayer income data.
One such case was a 29-year-old Okeechobee woman who filed a report in January with the local Sheriff’s office after discovering a tax return was previously submitted in her name, giving the thieves a refund of $1,500.
According to the IRS, there were nearly 736,000 reports of fraudulent contacts since 2013, a majority of those by scammers posing as IRS agents. Phone rip-offs have cost taxpayers more than $23 million, the agency says.
With more taxpayers turning to the Internet to file taxes quickly and easily, the problem of identity theft is far from a minor nuisance. The IRS estimates it prevented $24.2 billion in identity theft in 2013; a report by the U.S. Government Accountability Office shows the IRS still paid $5.8 billion in fraudulent refunds, up from $3.6 billion the year before.
Seniors and immigrants are particularly vulnerable to identity theft, IRS officials say. Usually, the scam begins with a call to victims asking for Social Security numbers.
“Callers claim to be employees of the IRS, but are not,” the IRS website advises. “These con artists can sound convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.”
In a recent Context Florida op-ed, Apryl Marie Fogel of the 60 Plus Association, a nonpartisan senior advocacy group, warns that the use of technology and a lack of online security will only increase the problem.
“There are literally millions of online accounts that criminals can use to prey on legitimate taxpayers, stealing their identity and pocketing their hard-earned money,” she writes. “Everyone is at risk, especially seniors.”
As an example, Fogel points to the 2015 instance of two former TurboTax employees who acknowledged the existence of accounts that “were 100 percent used only for fraud.” The pair accused TurboTax management of “forbidding” either flagging or turning off the fake accounts while refusing to implement security measures to stop widespread fraud.
In Florida, Attorney Gen. Pam Bondi’s office released a checklist to help safeguard taxpayers from fraud and identity theft:
- File tax returns early;
- Research tax preparers thoroughly before providing personal information;
- When filing electronically, Use a secure Internet connection. Do not use unsecured, publicly available Wi-Fi hot spots;
- Mail tax returns directly from the post office, not from home;
- Many taxpayers are eligible for an Identity Protection PIN from the IRS. Should someone enrolled in the IRS IP PIN program and file a return with an incorrect PIN, the IRS will reject or delay the return until submitted with the correct PIN and the taxpayer’s identity is confirmed. To obtain an IRS IP PIN IRS.gov;
- The IRS will never initiate contact by email, phone, text or social media. If the IRS needs information, it will first contact by mail; and
- If a Social Security number has been compromised, contact the IRS ID Theft Protection Specialized Unit at (800) 908-4490.
Also, the 60 Plus Association issued a news alert/fact sheet with tips, precautions and things to keep in mind to avoid being scammed, which includes information about the IRS services available for seniors and others with low incomes. 60 Plus also provides an online resource with more information geared toward older adults: www.60Plus.org/StopIRSScams.