It is tax refund time, and many people are looking forward to receiving their returns. Unfortunately, yours may be one of those being intercepted by computer hackers.
The IRS has admitted this is happening.
Since the income tax filing deadline just passed on April 15, you and many other Americans may be expecting a check in the mail. If you are one of those who identity has been compromised, you may be waiting a long time.
The IRS noted that last year, they helped more than 800,000 victims of this type of identity theft.
Identity-theft is now big business – a real and growing problem at tax refund time. The latest estimate is that the IRS lost around $8.5 billion to fraudulent refunds in 2013 and they successfully prevented another $24.2 billion in false refunds from being paid.
In 2014, the IRS initiated 1,063 identity theft-related investigations and they successfully prosecuted and won 748 prison sentences for fraudsters, each with an average sentence of 43 months.
Unfortunately billions of dollars were stolen without a trace.
If you are expecting to receive a refund and it doesn’t arrive within a few weeks of when you expect, you should probably start worrying that it isn’t coming. That is the time to fllow up with the IRS, your favorite government agency. You may eventually discover that someone else submitted a tax return using your name and details, and the IRS issued the refund to them.
The National Center for Policy Analysis (NCPA), a non-profit think tank that develops and promotes private alternatives to government regulation and control, says this problem usually starts with a stolen Social Security number. That Social Security number allows a scammer to file a tax return claiming a fraudulent refund. NCPA says the lodgement is often made before the person’s employer has filed the employee data. That means the IRS cannot cross-check the fraudulent return against actual data.
Good News And Bad News
The good news is the taxpayer can usually get their refund. The bad news is that it can take up to a year, and they don’t discover this has happened until some time after they lodge their tax papers. In the meantime, their Social Security number could be used for other fraudulent purposes.
How can this be avoided?
Advice from the IRS is that you should be very careful with your Social Security number. Do not carry it with you, do not write is on any other documents you carry, do not give it to anyone who asks for it. Finally, only provide your SSN when it is absolutely necessary.