Identity Theft Based Tax Fraud Is On The Rise
Attention taxpayers: File your taxes early, before crooks do it for you.Playlist
Attention taxpayers: File your taxes early, before crooks do it for you.
That’s one of the takeaways of a new report by the IRS, showing that identity theft-based tax fraud is on the rise. That’s when crooks file fake tax returns using real names, addresses, and Social Security numbers. Then, they set up a fake address, and have refund checks mailed there, instead of to legitimate taxpayers.
In the past year alone, the IRS stopped five times more fake returns from being processed than the year before. In fact, experts say identity theft-based tax fraud is so common today, that police recently shut down a school in Florida that was offering classes in how to commit it!
The good news is that the IRS recently added new filters to their electronic filing system, to help screen out potential fake returns. And those filters have already led to more than 100 arrests! However, there are still some things you can do to help make sure you don’t become a victim of tax fraud:
• First, file your taxes as early as possible. That’s because crooks tend to file fake returns before legitimate taxpayers. They’re hoping to get your refund check mailed back to them before you ever notice a problem.
• Also, if a family member died in the past year, ask a tax expert about filing a “deceased” return. That’s because a growing number of crooks are using tax information from the recently deceased to steal money.
• Finally, be prepared to document any changes in your job, address or name in the past year. Because those are the top three reasons your legitimate return may be flagged as “fraudulent”.