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Avoiding Tax Identity Theft

“Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS.”…IRS Tips for Taxpayers, FS-2014-2, January 2014

According to an IRS report, Mauricio Warner, a Georgia resident, had a $10 million tax fraud and identity theft operation underway before he was caught and convicted. Warner used the names and social security numbers of online victims who “were told they could submit an application for an ‘Obama stimulus payment’ or ‘Free Government Money.’”

Warner was sentenced to 240 months in federal prison and three years supervised probation, ordered to pay over $5 million in restitution, and forfeited his $4.1 million bank account.

The IRS has been aggressive in tracking down identity thieves and criminals like Warner. Its Identity Theft Clearing House since its inception in 2012 has pursued over 7,600 leads involving 1.47 million fraudulent returns amounting to almost $7 billion.

Avoiding Tax Identity Fraud

If you’re the victim of a tax-identity theft, your tax return may only be the beginning. The IRS recommends the following precautions:

Don’t fall for scams

tax fraud identity theftAny email addressed directly to you claiming to be from the IRS is fraudulent. The IRS never contacts taxpayers by email or social media. They do not use the web to demand payment or offer refunds to taxpayers. Forward suspicious email to [email protected].

Likewise, unexpected phone calls from someone claiming to be an IRS agent are impersonation scams. The caller might ask for personal information to send you a refund or threaten you with arrest or deportation if you don’t pay an overdue tax bill. Report these impersonation scams online or call 1-800-366-4484.

Finally, any website that claims to be an official IRS site but does not begin with www.irs.gov is bogus. Make a phishing report at the link cited above.

File early and hold your personal information close

File your tax return as early as possible. Income tax identity thieves strike early in the year.

Safeguard your social security number and never give it out unless you have initiated contact requiring its disclosure. Never routinely carry a social security card or documents that display your social security number.

Protect all personally identifiable information on your computer. Use firewalls, anti-spam and virus detection software, and use secure passwords for Internet accounts. Be especially discrete with your online activity in public places over non-secure networks.

If you become a victim

The signs

You are likely to have become a victim of tax fraud if the IRS informs you that:

  • they have received more than one tax return filed under your social security number
  • you owe the IRS money for a refund overpayment
  • you reported wages from an employer you never heard of

What to do

Don’t procrastinate; work with the IRS. In addition to following the FTC-recommended steps to limit the damage of identity theft:

  • respond to the IRS notice right away using the telephone number and contact information on the notice
  • complete IRS Form 14039, the Identity Theft Affidavit. Go to IRS.gov/pub/irs-pdf/f14039.pdf and follow the instructions for transmitting the form to the IRS.
  • pay your taxes and file your tax return, even if you must use paper documents

It might take a while, and you could use some help

Tax identity fraud cases can become complex and perplexing. An IRS resolution to tax identity fraud could drag on for months. If you need help in extricating yourself from identity-theft problems, Dukhon Tax and Accounting offers just the expertise, advice and services to individuals and businesses on a year-round basis.

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