But there’s another reason to get taxes done early: identity theft. That’s when someone gets your Social Security number or other identifying information and forges a tax return in your name to get a refund.
This tax season, the IRS has created a section on its Web site loaded with information and tips on how to keep yourself from becoming a victim of this crime. Go to www.irs.gov and click on “identity theft.” You will see links to YouTube videos, podcasts and victim-assistance resources.
I know a lot of people don’t want to deal with the IRS, and sometimes it can be a trying experience. But just imagine the frustration of having someone file a false tax return using information stolen from you. Identity thieves often submit their fake returns early during the filing season before the victim finishes his or her real tax return — which is why you might want to file early.
Tax-refund identity theft is a growing problem. In 2010, the IRS was able to identify and remove almost 49,000 returns seeking fraudulent refunds of $247 million directly related to identity theft. Last year, it removed from processing almost 262,000 returns that sought almost $1.5 billion in fraudulent refunds connected to identity theft.
“We are taking this issue very seriously,” said IRS spokeswoman Julianne Fisher Breitbeil.
The agency recently announced a crackdown on tax-refund fraud and identity theft. Working with the Justice Department’s tax division and U.S. attorney’s offices around the country, the IRS targeted 105 people in 23 states as possible identity thieves. Officials indicted, arrested and served search warrants to people they suspected of stealing thousands of identities and taxpayer refunds.
Last month, a federal grand jury indicted an Arizona man accused of using stolen names and Social Security numbers of deceased people to file false tax returns and collect more than $279,000 in refunds. In Los Angeles, five people recently were indicted for allegedly filing fraudulent tax returns with stolen identities. Among them was a woman accused of stealing information from the California Department of Public Social Services computer system. In that case, the fraudulent returns claimed the earned-income tax credit or the credit for first-time home buyers to snag as much as $8,000 per return, the IRS said.
As part of their crackdown, IRS auditors and investigators visited 150 check-cashing facilities to investigate whether the operations were knowingly or unknowingly making it easy for criminals to commit refund fraud using stolen information. The IRS said it is auditing more than 250 additional check-cashing operations across the country and looking for indicators of identity theft.
“As fast as we are moving to update the system, there are people looking for flaws in the system,” Breitbeil said.
The IRS has taken several steps to close the gaps.
It has designed new screening filters that the agency said would improve its ability to spot false returns.
The agency is expanding a pilot program it began two years ago by marking the accounts of deceased taxpayers to prevent misuse of their names.
And late last year, the IRS gave a special “identity protection personal identification number” to 250,000 taxpayers whose identity-theft tax cases had been resolved. Those taxpayers will use that “IP PIN” when filing their tax returns for this year, Breitbeil said.
If you suspect you’re a victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490. You will be asked to complete IRS Form 14039, the identity-theft affidavit.
Most important, remember that the IRS will not initiate contact with you by e-mail to request any personal or financial information. If you get such a message, ignore it and delete it.
But don’t dismiss an IRS notice you get in the mail that indicates that more than one tax return was filed for you. And don’t disregard an IRS notice that indicates you received wages from an employer for whom you didn’t work and do not recognize. There could be someone out there stealing off your good name.
Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or singletarym@
washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. For more Color of Money columns, visit postbusiness.com.