Fraudulent Tax Filing Crimes on the Rise

Tax Filing Fraud is a crime that has become so pervasive that people ranging from a U.S. Attorney General to prison inmates have fallen victim. The IRS reported that it investigated almost 1,500 cases in 2013, a surge of 66 percent from 2012. This story has been all over the news recently but it deserves to be repeated. People need to know and be aware of the problem.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

In fraudulent tax filings, criminals submit tax returns for other people, using stolen information such as Social Security numbers and employer information. They then direct the IRS or state treasury departments to pay the refunds into their own accounts, collecting as much as $5.2 billion in fraudulent payments.

The issue hit home for many workers last week, when TurboTax temporarily halted filing state returns amid an uptick in fraudulent filings. The problem is on the rise, and several states that have issued warnings about the crime.

Generally, an identity thief will use your Social Security number to file a false return early in the year.  Very often, an identity theft victim will not even know there is a problem until they file their tax return and learn the IRS can't process it because someone else has filed using their name and Social Security number. The other impact is that criminals may use your data to engage in other identity-theft crimes, from applying for credit cards in their names to taking out loans.

For the victims of identity theft and a fraudulent return, it can be just the start of a major headache.  Identity theft can wreak havoc with your finances, credit history, and reputation, delay your tax refund, — and it can take time, money, and patience to resolve. 

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, you should take these steps as soon as possible:

•        Report the theft of the Social Security number to the IRS at http://www.irs.gov/uac/Identity-Protection. You can also call 1-800-908-4490.

•       Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.

•       Continue to pay your taxes and file your tax return, even if you must do so by paper. 
 If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490.

•        Report the identity theft to the Federal Trade Commission at http://www.idtheft.gov. You can also call the FTC Identity Theft Hotline at 1-877-438-4338.

•       File an identity-theft report with your local police. The police report will help clear your records and your name, and is necessary if you want to apply for a new Social Security number.

•       Contact the three major credit bureaus to place a fraud alert on your file. — Tell each of the three agencies that your SSN has been stolen. They will give you free copies of your current credit reports. Review those reports for unfamiliar accounts and unknown inquiries from companies.

Equifax, www.Equifax.com, 1-800-525-6285

Experian, www.Experian.com, 1-888-397-3742

TransUnion, www.TransUnion.com, 1-800-680-7289

•       Report the theft of your Social Security number to the Internet Crime Complaint Center at http://www.ic3.gov/. The report will be distributed to the relevant federal, state and local authorities. 

•       Close any accounts opened without your permission or tampered with.

•        Keep track of, record, report and close all fraudulent accounts by contacting both the companies holding the accounts and the credit-reporting agencies. This will keep your credit as clean as possible. The only way to get a new SSN from the government is to prove without a doubt that someone has used the old number, and records of fraudulent accounts can provide that evidence.

If you want assistance, legal representation, or just want to know more about Medvesky Law Office,  LLC, check out our website at www.medveskylaw.com.