As many of us prepare to file our income tax returns again this year, we can’t help but feel concern about the potential for tax refund fraud. What began in 2008 has tripled over the past three years. Millions of American citizens are affected.
Identity theft has many unfortunate consequences. One of which is tax refund fraud. With your name, date of birth and social security number, a thief can file a fake tax return and collect your refund. The IRS has not been able to stop it. In fact, they estimate that it sent out almost three million fraudulent refunds last year. The Government Accountability Office estimate that it cost tax payers $5.2 billion. And, the Treasury Department estimates the numbers are even much higher.
According to Don’t Mess With Taxes, one of the major reasons why tax fraud is so prevalent is the government’s objective to make filing and requesting refunds easy for taxpayers. George Piro, FBI agent and member of a special national tax fraud task force, told 60 Minutes:
“There are no supporting documents when you are filing electronically,”
“And that’s the ease or the convenience that was created for the benefit of the innocent taxpayer, which is now being exploited by criminals.”
So, what is the taxpayer to do? Fox News reported in How Scammers Steal Your Tax Return, some ways to help reduce your chance of being a tax ID victim. These include:
- Closely guard your personal information, especially your Social Security number.
- Shred all documents containing personal information, including account numbers, dates of birth, etc.
- Know your tax preparer.
Please read all of the ways to help reduce your risks of tax ID theft here.