Looking forward to getting a hefty tax refund check? File early to prevent identity thieves from submitting your return first. Hijacking tax returns is a growing business model for criminals who obtain social security numbers and falsify W-2 forms. The Identity Theft Resource Center tracked 783 data breaches in 2014, a 27.5 percent increase over 2013. In the aftermath of 2014 breaches, we can all safely assume that at least some of our personal information has been exposed.
Anyone who has had electronic data compromised has an increased risk for redirection of their refund check, because it is relatively easy for crooks to duplicate supporting documents and file fraudulently.
The IRS has trained 35,000 employees to work with taxpayers to provide assistance with identity theft. Even so, tax-related identity theft cases grew from 15 percent in 2010 to a reported 43 percent in 2013.
If someone else beats you to filing, the IRS will issue the check to the first filer and will flag your return when you submit later. You will receive a letter from them saying that you have already received your refund, and it will take months for you to make the correction. You will eventually get your refund, but that means the government will have paid that amount twice. And guess who will end up footing the bill? That’s correct; all of us will. Last year’s U.S. Government Accountability Office (GAO) report estimates that fraudulent refunds cost taxpayers $5.2 billion. Treasury Department officials have gone on record saying that the number is much higher.
So how do you protect yourself? One way is to ensure that your email service provider has security measures in place to stop the phishing and other email-based threats that cybercriminals use to steal personal identification and financial information. By now everyone should know not to accept as legitimate an unsolicited email from the IRS or tax preparation service requesting a login.
IRS tips to prevent fraudulent filing can be found here: http://www.irs.gov/uac/Newsroom/Tips-for-Taxpayers,-Victims-about-Identity-Theft-and-Tax-Returns-2014
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