Identity theft can happen to anyone, and be detrimental to your credit score and your financial well-being. One method of identity theft is filing a tax return under another name and SSN to claim the refund. Because of this, tax season is a time to be especially aware of your finances. Fortunately, the IRS is also very aware of this fact, and they have implemented procedures to combat this issue. For the 2013 tax season, they have more than 3,000 employees working on identity theft issues, and they have also trained 35,000 of their employees to recognize the initial indications of identity theft and to help those affected by it. Below are ways the IRS are making improvements to help protect you and your business from identity theft.
 
Refund Fraud Detection and Prevention.

  • Additional Screening Filters. The IRS has recently increased the number of identity theft screening filters that spot fraudulent tax returns before the refund is issued. They have also improved the quality of these filters to better protect taxpayers.
  • Increased Identity Theft Investigations. Taking this issue very seriously, the IRS is working hard to ensure that as many people are protected as possible. IRS Criminal Investigators tripled the number of identity theft investigations in 2012, initiating 900 investigations. As a result, nearly 500 people have been indicted across the country. The IRS is working with over 130 financial institutions to identify potential fraud and identity theft. This collaboration has helped protect millions of dollars.
  • Working with Law Enforcement. The IRS also has a program in place to share information with local law enforcement that will help with investigations, and pursuit of identity thieves. So far this program has been put into effect in 9 states, Alabama, California, Georgia, New Jersey, New York, Oklahoma, Pennsylvania and Texas. Together, these states represent a large percentage of the overall tax refund frauds. Plans are underway to continue the expansion of this program.

Increasing Efforts to Help Victims.
In addition to the IRS’ efforts in preventing identity theft, they have expanded their efforts to aid the victims of identity theft. Identity thieves generally steal information from sources outside the tax system; however the IRS is often the first to inform victims when their identity has been stolen.

There are three specific ways the IRS seeks to help victims:

  • An IP Pin. The IRS issues an Identity Protection Personal Identification Number (IP PIN) to victims. The IP PIN confirms that the tax payer is the rightful filer of the tax return. These also ensure victims are not forced to delay filing or receiving funds. In 2013 more than 600,000 IP PINs have been issued.
  • Victim Case Resolution. The IRS is continuously expanding this department for resolving cases of identity theft, and they are still adding employees for this coming tax season. Currently, cases take about 180 days to resolve, but they are working to streamline and expedite this process.
  • Service Options. The IRS has an Identity Protection Specialized Unit that victims can contact for help and information regarding tax issues. 1-800-908-4490.

Improved Criminal Investigations.

  • Increased Criminal Investigation Department. The IRS has a large criminal investigation department. In 2012 they tripled their number of criminal investigations from the previous year.
  • Improved Communications. As mentioned, the IRS has established a program allowing identity theft victims to authorize the IRS to share information with local law enforcement. This kind of communication makes it much easier to both identify and indict these criminals. More than 65 law enforcement agencies are participating in this effort, and over 1,000 waiver forms have been received from taxpayers.
  • New Investigation Guidelines. The IRS has also been working with the Tax Division of the Department of justice to create new guidelines for expediting investigations into identity theft refund fraud.

The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victims. Even with all of the steps the IRS is taking, identity theft through refund fraud is still an issue. Identity theft cases are some of the most complex cases that the IRS handles. Stay aware this tax season, and be glad the IRS is working hard to protect you.

For more information on this topic, check out the IRS’ Taxpayer Guide to Identity Theft.

Comments (6)

Kaitlin Cathey

Kaitlin works at ATBS with the sales team. She has a Bachelor of Arts in Anthropology, from Thomas Edison State College in NJ. She was born in Colorado, but has also lived in Maryland and Illinois. Her favorite things to do are running, reading, and creative writing.

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Lawrence E. Bell

As times get harder the criminals get smarter at finding ways of stealing from those of us who work for a living. Unfortunately our information is out there in cyberspace by the truckload and is for sale to the highest bidder. I am a conspiracy theorist to the heart. A whole industry has evolved from protecting the American people from identity theft. From companies that watch for identity theft to to lawyers and firm who help get your identity back after you have even violated. All costs get us time, money and heartache.
Then we must spend time proving that we aren't the criminal.

January 04, 2014 22:00:04 PM

Kim Behne

Thanks for the info.

March 02, 2013 7:56:49 AM

Lee Craig

this info will come be handy to know and have

February 28, 2013 19:38:25 PM

Craig McCue

Kaitlin,
Great article!! This is becoming an ever increasing problem and I had no idea the IRS was working to help protect our idenity and finances. I would like to add the following information. I have worked for companies in the recycling business and you would be suprised how much personally sensitive information is thrown away as "garbage". In addition to what Kaitlin talked about, I would highly recommend to everyone that they shred or burn ALL mail and documents that has any personal information. Anything not required to file your taxes such as credit card offers, credit card statements, personal bank statements, bills, literally everything. SHRED THEM! We have a good quality shredder and we fill the hopper about every two weeks, then bag the shredded material and thow it out in the recycle.

I have walked through Material Recovery Facilities (MRF) and seen all types of personal items that people "throw away" assuming they are now gone forever. In many places in the United States, items thrown into the garbage AND into the recycle bin go to a recycling facility and are processed there. I've seen bank statements, cancelled checks, social security statements, drivers licenses and the list goes on, to long to list here. A thief chould get a job in one of these places and within one work shift, have enough information to steal the identities of dozens of people. The recycling facilities have security on site and they do a good job of processing the material and sending it out for recycle in a timely manner, however, a large majority of the processed recycled material is shipped overseas to countries such as China to be turned back into new products such as paper and newsprint material, but we as "responsible adults" need to take ownership of our identity and do our best to protect it.

It bears repeating again - Do not throw anything away with any of your personal information on it without first destroying it in some fashion!!

February 27, 2013 8:45:41 AM

Linda Caffee

Kaitlin it was interesting to read that the IRS is taking measures about this insidious crime. Kraig brings up some very good points about what identity theft can do to an over the road truck driver.

February 27, 2013 4:41:53 AM

Kraig Allen

IRS to really be trusted? My opinion think not.

Dave Ramsey recommends life lock, but please look it up first on his web site or listen to him on xm 168 noon till three week days. Anyway it is the only program of its kind that will assign you a counselor who will make ALL of the contacts and straighten your identity back to where it was prior to being stolen. If you know of someone that this has appended to its a full time job of police reports, being accused of being a thief, lying, dead beat etc. I've had this program for years I think it's eight dollars a month. The only thing other offerings do is notify you that there are questionable activities going on with your credit.

Think about it, as an over the road driver, do you ave the time if someone opened up 20 plus accounts in your name, to contact each one, while being on road 40 minutes for each individual, get back to them tommorow. Send twenty a certified, receipt return letters, with the info notorized that your telling the truth, follow up in having it removed from your score and than running your credit making sure it happened and than do it all over again when it's not fixed. No more expensive than any other offer I've ever received and no where does the competition assign you someone to do the dirty work.

February 26, 2013 20:03:09 PM