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Form 1040 shows tax refund fraud
Posted on February 27, 2014 by in Credit Fraud & Monitoring, Identity & Privacy, Personal

Let’s face it. Next to the holidays, tax season is one of the most stressful times of year.  We lose receipts, wait on W-2s, and, now, have to worry about tax refund fraud. What’s tax refund fraud? It’s when an identity thief files a fraudulent tax return using your personal information to claim your tax refund. It’s not a pleasant experience. I should know, an identity thief stole my tax refund in 2012.

IRS ID Theft Form

The theft wasn’t discovered until our accountant filed my husband’s and my joint tax return. One day we were getting a refund, the next our accountant was calling with the bad news that somebody living outside our state had already filed separately under my name. What had hurt us was that we’d waited longer than usual to file due to late tax forms. The situation was outside our control and the delay gave this identity thief a head start on their crime.

Tax Refund Fraud Fact and Figures

Following are some startling tax refund fraud statistics released by the United States Department of Justice (USDOJ):

  • Between 2008-2012, identity thieves stole 550,000 taxpayers’ identities for the purpose of filing fraudulent tax returns;
  • In 2013, the USDOJ charged more than 880 defendants will stolen identity refund fraud

According to the Internal Revenue Service (IRS),

“For FY 2013, the ITC [Identity Theft Clearinghouse] received over 1,400 identity theft related leads.  Those leads related to more than 391,000 tax returns claiming in excess of $1.3 billion dollars in potentially fraudulent federal income tax refunds.

IRS Tips To Protect Yourself From Tax Fraud

Here are 7 tips directly from the IRS website that can help you to minimize your risk of becoming a victim of tax fraud:

  • Don’t give a business your SSN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls, anti-spam/virus software, update security patches, and change passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

With all the data breaches to make the news lately, and the fact that one out of every three people involved in a data breach becomes a victim of identity theft, we should all be on high alert. Remember, too, that once you become a victim of identity theft, it’s likely other attempts will be made, which is why it’s important to regularly check your credit report.

If you’ve already become a victim or identity theft, please click here for some helpful advice .