The Rapidly Spreading Threat of Tax Return Fraud
With the ease of online filing, direct-deposit refunds, and virtual tax forms that auto-fill with the details of last year's returns, it's easier than ever to put off finishing your taxes. Unfortunately, procrastinating until the very last minute could cost you.
A recently released report on tax-related identity theft suggests that a rapidly growing form of fraud—the use of stolen Social Security numbers to intercept victims' tax returns—is becoming a significant risk, and one that can be minimized by filing your taxes as early as possible.
The report, compiled by the Consumer Sentinel Network--a fraud-fighting coalition of law enforcement agencies organized by the Federal Trade Commission--notes that someone filing a fake return in your name can result in a delay of six months or more (not to mention hours of hassle) before you receive the money you're owed.
If a thief obtains your personal information it can be used to impersonate you, make purchases in your name, or open new bank and credit accounts. Monitoring your personal identity information and your credit file are important ways to begin to protect against this kind of theft. By keeping your Social Security number, date of birth, and account numbers secure at all times, you'll greatly minimize the chances of a criminal using those pieces of data to construct a false identity for themselves—the first step to tax return fraud or other kinds of identity theft.
Taking responsibility for your personal security when using the Internet and making sure that personal documents are properly destroyed or disposed of are two important steps to avoiding the kinds of opportunities that can lead to this type of theft. For more information on how you can help keep you and your family safe from identity thieves, visit the Education area of IdentityProtection.com.
To fight tax return fraud, specifically, taxpayers can make a point to submit their tax returns to the IRS as soon as possible each year. If your electronic return is rejected, the IRS suggests that you file a paper return immediately, and then fill out an IRS Identity Theft Affidavit, also known as Form 14039. Contacting each of the three major US credit bureaus at this time is also recommended.
The fact that identity thieves are becoming more daring and clever each year means that American taxpayers must also remain vigilant and observant to keep their identity, their finances, and their online reputation safe from all threats.