How to avoid someone using your name for a tax rebate

  • By Michelle Singletary
  • Wednesday, February 8, 2012 9:06pm
  • Business

I’ve set up the tax table. Every year, my husband and I pull out a white folding table to begin organizing our tax documents that will eventually be handed over to our tax preparer. We put it up early this year, instead of waiting until the end of March when we’re scrambling madly. This time, we’re determined we won’t be among the millions of procrastinators who wait to file on the last day, which this year is April 17.

There’s another reason to get our taxes done early, and that’s identify theft, in which 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 new section on its website with information and tips on how to prevent this. Go to irs.gov and search for “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 your information.

Identity thieves often submit their fake returns early in the filing season — which is why you might want to file early — before the person has a chance.

Tax-refund identity theft is a growing problem. In 2010, the IRS was able to identify and remove almost 49,000 bad 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 spokesperson Julianne Fisher Breitbeil.

The IRS recently announced a crackdown on tax-refund and identity theft. Working with the Justice Department’s Tax Division and U.S. attorneys’ offices around the country, the IRS targeted 105 people in 23 states. Officials indicted, arrested and served search warrants for people they suspected of stealing thousands of identities and taxpayer refunds.

Last month, an Arizona man was indicted by a federal grand jury for allegedly using stolen names and Social Security numbers of deceased individuals to file false tax returns collecting more than $279,000 in refunds. In Los Angeles, five people were recently indicted for allegedly filing fraudulent tax returns with stolen identities. Among those indicted was a woman who allegedly stole information from the California Department of Public Social Services computer system. The fraudulent returns in that case claimed the first-time homebuyer credit and/or the earned-income tax credit, worth as much as $8,000 per return, the IRS said.

To further crack down on identity theft, 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 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.

To close the gaps, the IRS has designed new screening filters that the agency said would improve its ability to spot false returns.

The IRS is expanding a pilot program it began two years ago by marking the accounts of deceased taxpayers to prevent misuse of their names. Breitbeil said that late last year, as part of another initiative, the agency gave 250,000 taxpayers, whose identity theft tax cases have been resolved, a special “Identity Protection Personal Identification Number,” or IP PIN, to use when filing their tax returns for this filing season.

If you become or suspect you’re the victim of identity theft, contact the IRS Identity Protection Specialized Unit toll-free at 800-908-4490. You will be asked to complete an identity-theft affidavit, which is IRS Form 14039.

Most importantly, remember that the IRS will not initiate contact with you by email to request any personal or financial information. If you get such a message, ignore it and delete it. However, don’t dismiss any 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 you do not recognize. There could be someone out there stealing off your good name.

Michelle Singletary: singletarym@washpost.com.

Washington Post Writers Group

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