It’s always a relief when tax time is over and you can get back to not worrying about Uncle Sam for another year. That is, if you’re not a victim of tax time identity theft. If you are, you could find yourself in quite a close relationship with the good old uncle for months or even years longer than you had hoped. According to the Government Accountability Office, the IRS identified nearly 245,000 incidents of taxpayer identity theft in 2010 – which is almost a 400% increase over 2008.
In most cases, this type of fraud occurs when a person uses another person’s Social Security number to file a return. For example, a troop leader used the information of girls in her troop to get $87,000 of refunds that were not actually owed to her. People can also use victims’ SSNs to get jobs, and then the victim ends up with income that is not reported – which could lead to an audit and substantial fines. This has been a huge ongoing problem with illegal immigrants.
The IRS takes this type of crime seriously and is trying to increase its identity protection efforts. For example, it’s supplying special identification numbers for people that may have already been victimized by identity thieves. It’s also working to freeze the Social Security numbers of people who have died so that they cannot be used. It attests that through its efforts, it has prevented over $900 million in fraudulent refunds since 2009.
There is still a huge problem, though. The IRS usually only knows that fraud has occurred after two individuals file a tax return under the same number. This means that if you file early, chances are you can have the problem taken care of fairly swiftly if a thief tries to file after you using your information. If it’s the other way around, though, it could take quite some time to get everything fixed.
Sometimes it’s impossible to file your taxes right away though, which is where identity theft protection services can help – alerting you to fraudulent uses of your Social Security number very soon after they happen, or helping to prevent them from happening at all. There is only so much that the government can do. You have to take responsibility for your own personal security nowadays. Who knows how many tax fraud victims there were in 2011?