In 2013 the IRS reported that 5.2 billion dollars were dispersed to identity thieves, according to the Government Accountability Office. The thieves filed fraudulent tax returns for unsuspecting citizens, and the IRS did not catch it until well after the refund check had been delivered.
Even though $5.2 billion sounds like a lot, which in reality it really is, the IRS stopped another 24.2 billion dollars in attempted fraud. The full extent of the fraud issue is hard to fathom, but it is still an issue that everyone needs to be aware of.
Here’s what you need to know: Thieves steal your personal information before you even receive your W-2 from your employer. Thieves will then file a fake income tax return on your behalf before you get a chance to file a legitimate return. The thieves then sit back and collect the refund check. It seems to happen fairly fast, and with the IRS trying to issue refund checks within three weeks of receiving your return there really isn’t much time to catch the fraud.
Want to know the best way you can deter tax refund fraud? File early, and file electronically! The IRS will reject any tax returns with your Social Security Number that are filed after yours is received. By filing early and electronically you are ensuring your tax return is processed before any fraudulent ones can be received.
The good news is that the IRS is starting a program to distribute single-use personal identification numbers (PIN) for protection to taxpayers for identity purposes. The initiative is still trying to get its feet off the ground, so be sure to file early to prevent any fraudulent activities.Have questions about how to prevent identity theft tax refund fraud for you? Give me a call at 573-686-3053 and I’ll be happy to sit down with you.