According to a soon to be released report by the Government Accountability Office, tax identity theft has skyrocketed since 2008. According to the IRS, from 2008 to 2010 the incident of taxpayer Identity theft in the US has increased from around 50,000 cases to nearly 250,000 cases.
“The incidence of tax-related identity fraud is indeed staggering,” said Paul Stephens, director of policy and advocacy for Privacy Rights Clearinghouse. “The number of reported cases significantly undercounts the actual numbers because there tends to be a significant delay in detecting most cases of tax-related identity fraud.”
Taxpayer identification theft occurs when an individual submits a bogus tax return using a stolen Social Security number. The identity thief receives a tax refund and when the legitimate return is filed by the actual taxpayer, it is rejected since the return was already processed.
Some cases involve people using someone else’s Social Security numbers for employment purposes. This results in unexpected reported income for the actual Social Security number holder.
Another possible reason for the large increase is the rise in electronic filings. The IRS is still looking for solutions.
Tax identity theft can be a nightmare for victims. Potential victims may file Tax form 14039, also known as the IRS Identity Theft Affidavit.
Taxpayers are encouraged to guard their personal information closely and notify the IRS immediately if they suspect identify theft. Be sure to protect personal information most importantly Social Security Numbers.
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