Tax identity theft is increasing across the country and Idaho is no exception. The number of cases of people using someone else’s name and social security number to file a false tax return more than quadrupled last year in Idaho.
In 2013, there were 74 cases of tax identity theft. Last year, that number jumped to 352 says Idaho Tax Commission's Doreen Warren.
“We’re always trying to stay one step ahead of the bad guys, but they’re getting smarter. We receive fraudulent returns all year long, so we’re always on our toes, looking for those new schemes or trying to identify fraudulent returns,” Warren says.
Fraudsters aren’t just using identity theft. In 2013, 574 cases of tax fraud, including tax identity theft, were found by the commission.
Warren says that number also went up last year. “During 2014 we identified 1,115 confirmed tax fraud returns. That saved the state approximately $1.4 million in refunds from going out.”
Nationwide, the Internal Revenue Service is also reporting plenty of fraud cases. From 2011 through October of last year, the IRS found 19 million suspicious returns.
The IRS uses identity theft data models and filters to spot suspicious returns. Warren says the Idaho Tax Commission has its own review for each of the 770,000 returns it receives in a year. That includes a search for things like tax fraud.
Warren says the best way to avoid tax identity theft is to protect your personal data. And file early, says Warren, “to try to get the returns in before any fraudster tries to file a return.”
But if you file a tax return and are told there’s already been one filed in your name, there are some steps to take. First, start with the IRS. “The IRS has a form which is an affidavit of identity theft,” says Warren. Complete that form, file it with your federal return and send a copy with your state return as well.
Warren says the state commission will try to find the fraudster and charge them, but that’s tough to do. “We do have some limitations because if the person is not in Idaho, our hands are kind of tied.” She says they work closely with the IRS and other states to try and find the criminals.
The IRS can also help. Victims of identity theft get a special IRS Identity Protection PIN. That’s a special six-digit number. Taxpayers can use it to identify themselves, thwarting the scammer. The IRS has given out around 1.5 million Identity Protection PINs.
The IRS also says there are a few warning signs of tax identity theft:
- More than one tax return was filed for you
- You owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return
- IRS records indicate you received more wages than you actually earned
- Your state or federal benefits were reduced or canceled because the agency received information reporting an income change. -The Internal Revenue Service
If you are a victim of tax identity theft, Warren says the Tax Commission will work with you to ensure you are the real person. This can take some time, says Warren, but eventually, “the taxpayer will still be made whole, we will make sure they get their appropriate refunds.”
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