Taxpayer identity theft is soaring!
IRS grappling with soaring taxpayer identity theft; sharply up from 2008 to 2010
Larry Margasak, Associated Press, On Wednesday June 1, 2011, 4:02 pm EDT
WASHINGTON (AP) -- Imagine filing your tax return and learning that someone
else got your refund. With your name and Social Security number, no less.
The IRS is grappling with a nearly five-fold increase in taxpayer identity
theft between 2008 and 2010, a Government Accountability Office official
plans to tell a House hearing Thursday. There were 248,357 incidents in
2010, compared to 51,702 in 2008.
The GAO findings, obtained by The Associated Press, don't begin to describe
the pain for a first-time victim, who must wait for a refund while the IRS
sorts out which return is real and which is a fraud.
Many identity thieves don't get prosecuted, according James White, director
of strategic issues for the GAO..
"IRS officials told us that IRS pursues criminal investigations of suspected
identity thieves in only a small number of cases," White says in testimony
prepared for a House Oversight and Government Reform subcommittee.
He said that in the 2010 fiscal year, the IRS criminal investigations
division initiated just over 4,700 investigations of all types -- far less
than the identity theft cases alone.
"We want to know why this problem is apparently getting much worse," said
Rep. Todd Platts, R-Pa., chairman of the subcommittee. "By bringing these
issues to the public as quickly as possible, the committee hopes to give
citizens the necessary information so they can protect themselves from such
IRS Commissioner Douglas Shulman, in his prepared statement, defended the
criminal investigation record. He said his criminal division concentrates on
schemes of national scope and added that 95 percent of those prosecuted for
refund-related identity theft go to prison.
Tax identity thieves typically submit returns for refunds early in the
filing season. The legitimate taxpayer usually files later, and only then
learns from the IRS that two returns were filed using the same Social
Some thieves steal a name and Social Security number to obtain a job. The
employer will report the thief's wage information to the IRS, as would the
legitimate taxpayer's employer. The victim then would receive an unwelcome
IRS notice that he or she failed to report everything that was earned. The
victim would then need to work with the tax agency to sort things out.
Shulman said the IRS can significantly increase its protection after someone
has been victimized the first time.
One victim, LaVonda Rae Thompson, 52, of York, Pa., plans to tell the
committee about what she calls "my nightmare."
She had to make rounds of calls to the IRS and other government agencies,
sometimes repeating the same information. She spoke on the phone with an IRS
employee she described as "the most rude and discourteous person I have ever
spoken with in my life."
She was told her refund would take 16 weeks to six months.
She closed her bank accounts and opened new ones. She ordered new checks.
She placed a 90-day alert on her credit reports. She often has to show her
IRS identity theft affidavit.
"You may not be able to know how stressful this has been," she said in her
statement. "I can't sleep. I wonder what the person will do next as far as
trying to get credit cards or anything in my name."
Tax form 14039, the IRS Identity Theft Affidavit, allows the agency to mark
an account to identify future questionable activity. A task force of the IRS
and other agencies established a website, STOPFRAUD.gov, which tells
taxpayers what to do if they suspect identity fraud.
The main IRS website includes "Ten Things the IRS Wants You to Know About
If the IRS receives multiple tax returns for the same individuals, the
taxpayer usually must substantiate identity with a federal or state-issued
identification such as a driver's license or passport -- together with a
copy of a police report or the IRS affidavit.
This past January, the IRS developed a pilot program designed to lessen
delays for victims who deserve a refund.
Victims are issued an "identity protection personal identification number,"
which the IRS will use to process future returns. A new PIN will be issued
each year the taxpayer's account has been marked for potential fraud.
IRS website: http://www.irs.gov
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