Avoid Tax Identity Theft

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(Memphis) The recent data breaches at Target and Neiman Marcus certainly have consumers concerned about identity theft, and rightfully so.

Unfortunately, crooks tend to be one step ahead, and they often target tax season.

In fact, the act of thieves stealing personal information, then filing a return in that person's name is on the rise.

Last year alone, the Internal Revenue Service initiated more than 1,400 identity theft related criminal investigations.

That's compared to less than 900 in 2012 and only 276 in 2011.

IRS officials say this can be attributed to increased activity, plus the fact that agents are looking a bit harder.

The On Your Side Investigators often get complaints during tax season about rogue preparers who file without a client's permission.

We've also seen cases where customers' personal information has been left out in the open.

While this certainly happens, what's more prevalent, is crooks who steal identities before tax season then benefit from the refund later.

It can be as simple as a stolen purse, or as complex as the scheme run by a Memphis woman who lifted names from the Memphis Police Department warrant book and had taxes filed in those names.

IRS Media Specialist Dan Boone told WREG, "But they don't become aware that they've had their identity stolen until they get a notice from the IRS saying someone filed a return using their name and social security number."

Boone says the IRS has added more filters to catch fraudulent returns.  Victims of identity theft are assigned a special number, called an Identity Protection PIN, to use when filing their federal return.

Already a victim of ID Theft?

However, it's critical for all taxpayers to guard their personal information.

Tips for Avoiding Tax ID Theft

  • Protect your personal information
  • Don't carry social security cards around
  • Don't give out financial information online or over the phone
  • Ignore calls from people claiming to be from the IRS and asking for immediate payments
  • Get a free copy of your credit report every 12 months at www.annualcreditreport.com

If your financial information was compromised in the recent, data breaches, Boone says you should contact the IRS immediately.

"Let us know your information may have been compromised and that way, we can put a flag on your account and be watching to make sure someone doesn't file a return using your information."

Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

Additionally, reversing the results of tax identity theft can be a long and difficult process.

Victims have to spend a good deal of time proving they are who they say they are.

Boone says the average turnaround time can be 180 days.


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