US taxpayers are starting to realize the perils they are exposed to every tax filing season. The threat of a highly insidious organized crime has never been this grave. The number of tax return identity theft victims is staggering and each year, the numbers only seem to rise. Sadly, American taxpayers only realize that they’ve been victimized when it’s already too late!
As the tax filing season culminates, the government has reported that it worked on more than 200,000 cases in the first three months of 2013. The IRS labored overtime to have this issue effectively resolved. This year, the agency employed more than 3,000 people to work on tax returns alone. This clearly states the seriousness of this felony that has been plaguing honest taxpayers’ year after year.
Tax fraud conspiracy
This seasonal crime involves the filing of fraudulent tax returns by criminals whose main target is to embezzle personal information for their own financial gain. Tax fraud occurs when an identity thief obtains a legitimate taxpayer’s identity. They later use that information to file a tax return to be able to claim a refund under someone else’s name. The victim’s Social Security Number is the vital data that a thief requires to successfully file a tax return. With that information on hand, one can fraudulently process and claim a refund the following tax filing season. Individuals are left unaware that this has happened until they file their own tax return later.
Tax identity theft is a state-wide issue
Identity theft tax fraud is a nationwide issue that has caught the attention of the US government. As mentioned earlier, the IRS is continuously working to fight this crime that has affected hundreds of thousands of Americans. In Kansas alone, it was reported that there were 600 to 650 cases of identity theft in 2012. The methods used to victimize innocent people vary and are ingenious. Two Wichita locals were caught by Kansas authorities after obtaining medical records from a Wichita clinic. They used the embezzled data to file bogus tax returns during the 2013 tax filing season. Federal authorities have filed charges against the suspects. However, the government recognizes that to fight this crime, it will take more than just catching the perpetrators. Crime awareness must be imparted to prevent tax identity theft.
According to Ryan Deitchler, a counselor at Consumer Credit Counseling Service who volunteers for a free tax service for low-income people, there are a lot of citizens who are clueless about tax fraud. Deitchler filed a tax return for a senior citizen who badly needed the tax refund. Sadly, they discovered that his client had been defrauded. Deitchler states, “It’s a giant pain in the backside since they’re not likely to owe money; they’re not likely to get into trouble. But he did have to wait a few months longer, plus all the work and effort. It’s difficult, especially for somebody his age who didn’t really understand what was going on or what to do.”
Government efforts to help fight tax fraud
US authorities and involved government agencies are scrambling to find effective ways to avert identity theft and tax return fraud. This year, the IRS has issued an Identity Protection PIN (IP PIN) pilot program to reinforce the protection of taxpayers’ accounts. This nationwide initiative was launched to protect previous victims of identity theft by employing an additional layer of security on their IRS accounts.
The personal PIN has been issued to over 770,000 tax payers who were victimized by identity theft. The individual identifier serves as proof that a taxpayer is the rightful filer of the tax return. This campaign is believed to have resolved a significant number of identity theft cases. In addition, the IRS has partnered with 130 financial institutions to identify identity theft scams and protect refunds from falling into the wrong hands.
Cases opened and solved in numbers
The number of identity theft investigations had tripled in fiscal 2012. The IRS has reported that they started with 900 investigations with almost 500 suspects indicted across the US. From October 2012 through March 2013, over 670 criminal identity theft investigations were opened. The numbers are increasing but the government has not been lax in fighting the crime. This year alone- a nationwide effort to fight identity theft suspects led to “734 enforcement actions, including 298 indictments, information, complaints and arrests.” Criminals around the nation are being sentenced left and right. Guilty individuals will spend an average of four years in custody with sentences as long as 20 years.
Tips on how to protect yourself from tax fraud
Regardless of the identity theft filters that the government has employed, taxpayers must individually know how to safeguard themselves from this crime. By following these tips, you can minimize the chance of becoming a tax fraud victim.
- Never give out your Social Security Number to strangers and people you do not trust. This information is key to identity theft and all types of fraud.
- Do not share you financial information. Be wary of telemarketing and online scams that solicit personal and financial data.
- Make it a habit to check your credit report and do as it often as you can. Monitoring your financial records from the major credit bureaus: Experian, Equifax and Trans Union is one of the best methods to check if you’ve been victimized by an identity thief.
- Make sure that your online accounts and personal computers/laptops are secured with an anti-virus program. Hackers have come up with ingenious ways to steal important information online.
Tax return fraud can be avoided if we apply extra diligence to our tax records and start taking this matter seriously. With the aid of the government and private financial institutions, this crime can be deterred with everyone’s combined vigilance and effort.
Were you a victim of tax identity theft? Feel free to share your thoughts and experience below.
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