Tax Related Identity Theft Scams Up 300%
Cases of stolen tax returns have surged over the past five years,
leaving many identity theft victims struggling to recoup their lost
refunds.
Approximately 155 million tax forms are filed annually. This provides
identity thieves with an opportunity to come out of the woodwork and
steal from Americans who are just trying to pay their taxes correctly.
A recent Scripps Howard News Service investigation
analyzed more than 1.4 million ID theft records from the U.S. Federal
Trade Commission from 2005 through early 2010. In it they found that
fraud complaints about stolen tax return-related identity theft jumped
from 11,010 complaints in 2005 to 33,774 in 2009. That’s nearly 300
percent.
Thieves may steal victims’ refunds, trick them into disclosing Social
Security or credit card numbers, or even pose as the IRS. Below is
more information for those common and lesser-known tax scams to watch
out for.
Employment Identity Theft Scams: If you ever receive
documentation in the mail indicating earned income that you are not
aware of, it may mean that someone else has used your Social Security
number to gain employment.
Account Takeover Scams: If, when filing your tax
return, you receive a letter from the IRS saying that you have already
filed, it it likely that someone else has filed a fraudulent return on
your behalf, in order to steal your refund.
Tax Preparer Scams: In an old scam that’s still in
play, tax preparers tell clients they must pay back stimulus payments,
and then pocket the money. Ads are also placed by scammers posing as
accountants to get your returns. Make sure you do research and choose
your tax preparer wisely.
Late Payment Scam: As people fall behind on their
taxes, lists are created and are printed in the local paper as public
record. Thieves can use these lists to call unassuming people and pose
as collectors.
Internet Phishing Scams: The IRS doesn’t send
emails. Phony IRS emails that try to lure taxpayers into giving out
personal information are a common scam. The messages are generally
intended to convince recipients to provide personal or financial
information that enables the perpetrators to commit credit card or bank
fraud, or other forms of identity theft. Unless you are actively
engaged in dialogue with an IRS agent, do not respond to emails or
phone calls supposedly coming from the IRS.
IRS Scams: If a scammer posing as an IRS agent ever
contacts you, they may already have some of your personal information,
which they can use to try to convince you that they are actually from
the IRS. This data could come from public records or even your trash.
The scammer will often put pressure on you to comply with their request,
or even offer you a tax refund.
Here are some suggestions to protect yourself and make sure that you get your return:
1. Protect yourself by filing early.
It seems crazy to think that someone would fraudulently file taxes in
your name, but it’s being done. Once they find a few W2s or other
tax-related documents, they can file in your name and claim your refund
before you’ve even begun the process. File before they do.
2. Secure your mail with a locking mailbox. Mail is
stolen every day, and tax forms tend to include Social Security
numbers, making them especially valuable to a thief. Don’t send out
your tax return by sticking it in your home mailbox. Instead, take it
to the post office or use a big blue post office drop box.
3. Protect your PC. Whether or not
you file online, securing your PCs is essential. Make sure you have
updated antivirus software, a two-way firewall, that you run spyware
removal software regularly, and that your wireless Internet connection
is protected with a network key.
If you are ever a victim of a scam involving the IRS, you may be
disappointed by the way it is handled by government agencies. They
simply don’t allocate the resources to fix this problem proactively, nor
are they adept at responding once it has occurred. The biggest issue
is the thief’s privacy. Even if you think you know who is responsible,
neither the IRS nor any other government agency will release that
information. All you can do is follow the IRS’s instructions for
resolving the issue. Be patient, as rectifying it may take many hours,
days, or weeks. If you subscribe to an identity theft protection
service, a fraud resolution agent may be able to help.
McAfee Identity Protection
includes proactive identity surveillance to monitor subscribers’ credit
and personal information, as well as live access to fraud resolution
agents. For additional tips, visit CounterIdentityTheft.com.
Robert Siciliano is a McAfee consultant and identity theft expert. See him explain how a person becomes an identity theft victim on CounterIdentityTheft.com (Disclosures)
