Source: Examiner.com
As if the American taxpayer doesn’t have enough to stress out about this time of year. The IRS publicly acknowledged on Friday that taxpayer refunds are being intercepted by computer hackers. With the April 15 income tax filing deadline having just passed, many Americans in the coming weeks are apt to find that when it comes to their expected IRS tax refunds, the check is not in the mail.
Identity-theft has become big business when it comes to tax refunds. It is a real and growing problem. The IRS said it assisted more than 800,000 suspected victims of this type of theft last year alone. Latest estimates show the IRS lost an estimated $8.5 billion to fraudulent refunds in 2013 and stopped another $24.2 billion in false refunds from being paid.
This all translated to the IRS initiating 1,063 identity theft-related investigations in 2014. That in turn resulted in 748 prison sentences with an average length of 43 months. But that is a mere drop in the bucket compared to the billions stolen without a trace.
The first sign of trouble for any given taxpayer expecting a refund is when the clock shows it should have arrived weeks or months ago. That leads to that person finding out that someone else actually submitted a tax return in their name and got the refund.
This sort of tax-related identity theft usually occurs when someone steals a Social Security number and uses it to file a tax return claiming a false refund according to the National Center for Policy Analysis (NCPA). Thus, these fraudulent filings report false wage and tax withholding information. They are typically made early in the year long before employers are required to provide data to the IRS. That prevents the agency from reconciling the reported numbers and identifying a false claim.
What is the result of all this heartache to the real taxpayer? They usually don’t find out they’re a victim of this fraud until they actually file their real return. The really bad news is it takes up to a year or more to get the actual stolen refund from the IRS.
How to avoid all of this? To reduce the risk of having your Social Security number compromised, the IRS advises Americans not to carry their Social Security card or any document with their SSN on it, and not to give a business a SSN just because they ask for it. Provide your SSN only when it is absolutely necessary.