File early, be alert for IRS impersonators and tax frauds –
By Patricia Beech –
Identity theft has become a serious threat during tax season. Thieves steal people’s Social Security numbers and claim their tax refunds before they do – creating a situation that can takes weeks, months, or even years to correct. Most victims do eventually get their refunds thanks to various measures instituted by the Internal Revenue Service, states, and tax-preparers.
The number of taxpayers claiming they were victims of identity theft dropped 50 percent in the first nine months of 2016 according to Forbes Magazine. Still, the government reported that over three-quarters of a million people in 2016 were victims of tax fraud, amounting to more than $4 billion in fraudulent refunds.
One Peebles family, who prefer to remain anonymous, say their Social Security numbers were stolen by identity thieves who hacked the Anthem Insurance Exchange. They were surprised to receive a refund letter from the IRS.
“They told us to be expecting a refund, but we hadn’t even filed our tax returns yet,” said the mother of three. “Even our kids’ Social Security numbers were compromised – so I contacted the IRS and filed a report with the police.”
What can taxpayers do to ensure they don’t fall victim to identity theft and tax fraud? Experts say the best way to protect yourself is to file your taxes long before the April 18 tax deadline, making it less likely that someone will use your Social Security number on a tax form.
Like the family from Peebles, most people might not know they’ve been a victim of tax-related ID theft until they get an IRS notice informing them that they’ve collected wages from an unknown employer, or that their Social Security numbers have been used on more than one return.
Incidents of identity theft should be reported to the Federal Trade Commission, and victims should set up a fraud alert with one of the three big credit bureaus – Equifax, Experian, or TransUnion. The chosen credit agency will share alerts with the other two, and all three provide victims a free credit report. The agencies can also issue security freezes to prevent any new credit from being issued without permission.
On the official IRS website – https://www.irs.gov/, victims should fill out the Identity Theft Affidavit, Form 14039, and the IRS will provide each with an “identity protection personal identification number” (IP PIN) to prevent further fraud.
Experts warn that not all identity theft happens between strangers – many people are often victimized by family members who use their Social Security numbers without their knowledge.
One Adams County man (who also prefers to remain anonymous) says he was 17 years old when he learned he had been the victim of familial identity theft.
“When I went to the bank to borrow money for my first car I was turned down because of bad credit,” he says. “The bank let me know I had a lot of things on my credit – things I couldn’t have bought because I was 12-years old at the time – a lien on a house, a four-wheeler, and a Ford Explorer had all been bought in my name.”
Authorities discovered the identity thief was the man’s estranged father.
“I wasn’t able to fix it for a very long time, it was much more difficult because it was a family member,” he says. “It was a whole lot more trouble than you can ever imagine, and the trickle down effect from it was extensive. When I applied for college loans the following year, I could only get high-interest loans to cover those expenses my federal student loans didn’t cover, and I’m still dealing with those loans today.”
Now 30-years old, he says he carefully monitors his credit and takes immediate action whenever suspicious issues arise.
“For most people identity theft is something that happens to someone else in a place they’ve never heard of,” he says. “But, at 18-years old I had a $70,000 debt that wasn’t mine. I didn’t have to pay it off, but I’ve paid for it in so many other ways.”
The IRS encourages taxpayers to educate themselves about the various fraudulent schemes used by identity thieves, especially those involving IRS impersonators which tend to spike during tax filing season.
In 2016 employees from an India-based call center impersonated IRS agents and other U.S. government officials and extorted $30 million in phony debts from Americans.
Just remember – the IRS never asks for personal or financial information via email, text, or social media – this includes requests for PIN numbers, passwords, or information that would allow access to credit cards, banks or other financial information. The agency will also never contact anyone by phone to demand payment or ask for credit-card numbers.
Both the IRS and the Department of Justice warm taxpayers to beware of “phishing” scams which are typically carried out through unsolicited emails or websites that pose as legitimate sites seeking personal and financial information. Phishing scams should be reported to email@example.com.
According to the Department of Justice (DOJ) website, there are several ways identity thieves commonly steal people’s personal information.
In public places criminals may engage in “shoulder surfing”– watching you from a nearby location as you punch in your telephone calling card number or credit card number – or listen in on your conversation if you give your credit-card number over the telephone.
If you receive applications for “pre-approved” credit cards in the mail, but discard them without tearing up the enclosed materials, criminals may retrieve them and try to activate the cards for their use without your knowledge. Also, if your mail is delivered to a place where others have ready access to it, criminals may simply intercept and redirect your mail to another location.
Many people respond to “spam”– unsolicited e-mail – that promises them some benefit but requests identifying data, without realizing that in many cases, the requester has no intention of keeping his promise. In some cases, criminals reportedly have used computer technology to steal large amounts of personal data.
With enough identifying information about a person, a criminal can take over that individual’s identity to conduct a wide range of crimes. For example: false applications for loans and credit cards, fraudulent withdrawals from bank accounts, fraudulent use of telephone calling cards or online accounts, or obtaining other goods or privileges which the criminal might be denied if he were to use his real name.
If you are the victim of identity theft the Department of Justice recommends that you do the following: Call the companies where you know the fraud occurred; file a fraud alert with the IRS and get your credit reports; report the identity theft to the Federal Trade Commission; and, lastly, file a report with your local police department.