There is no recent data on how much tax ID theft is costing US government exchequer. But a study from the Government Accountability Office has estimated a loss for $5.8 billion centering such fraud in 2013.
The North Dakota Tax Department has stopped more than 900 returns claiming $1.3 million in fraudulent refunds last year. However, victims of tax identity theft related fraudulences eventually gets traumatized while passing through the further fraud prevention measures, reports KXNews quoting Kathy Schneider, Owner of Liberty Tax.
Fraudsters have reportedly breached an IRS database in 2015 and stolen records on up to 330,000 taxpayers. This tax record theft has prompted IRS Commissioner John Koskinen to devise new fraud fighting strategies. The strategy has been finalized upon consultation with agency staffers, state tax administrators and tax-preparation firms, reports The Wall Street Journal.
The newly adopted efforts are mostly invisible to taxpayers, but participants express satisfaction over unprecedented coordination. Different US states are adopting visible efforts as well.
Alabama and Georgia have programs that alert taxpayers if a return is filed using their Social Security number. Utah, Illinois and South Carolina are delaying refunds till March 1 or later for detection of patterns indicating ID theft, reports Nasdaq.
Old-line, stand-alone tax and accounting firms have been analyzed by the experts as the rich targets for thieves now a day. Thieves harvest large amount of data to prepare credible returns capable of slipping the fraud filters. Some tax-prep firms bombard prior users with emails this year urging to file returns and claim this year's refund. Clicking on the indicated links contained in the email may enable phishers designing very similar looking come-ons. Potential victims of tax ID theft may qualify for special IRS status. Vulnerable taxpayers with stolen tax data may file IRS Form 14039 alerting the agency. If the IRS approves the request, a special PIN will be sent that the taxpayer files with a paper return the following year. In opposite case, the tax authority may subject the return to heighten security. The IRS has posted a clear list of steps for victims to take at irs.gov. It includes a link to state tax agencies, which requires to be notified. Tax identity fraud victims are also advised to inform the Federal Trade Commission, which keeps statistics on ID theft and offers help for victims as well. Last year's tax related fraud incidences have compelled IRS to adopt special measures to help the potential fraud victims. Even the taxpayers are capable of feeling the coordinated efforts of the IRS. The US states are formulating their own preventive measures. However, IRS has urged the victims to report the fraudulence to irs.gov.
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