IRS Helps Identity Theft to Proliferate? That and Other Ideas about Identity Theft.

by Tom Buck

IRS scams have become much more common now as more and more scammers attempt to steal identities. Interestingly (and shockingly) the IRS is often the supplier of information used by scammers to perpetrate their frauds. The IRS is working hard to resolve this mess. We will withhold our opinion until we see how they did this current tax filing season.

The criminal mind makes a very interesting study. There are evidently numerous people in the world with very high IQs who would rather steal from others than use their brilliance to help the world. A significant number of them have decided that identity theft is the way to go.

If you haven’t done this already you need to seriously consider purchasing identity theft “insurance”. We are all increasingly exposed these days. Remember the old saying: “An ounce of prevention is worth a pound of cure.” Younger folks may not have ever heard this, but I guarantee people of my era will remember it as an “old saw”.

Things you should know include:

More common each year is the scam where a scammer files a tax return using a stolen name and social security number. The scammer shows a large refund is due and files VERY early in the filing season so as to have the fraudulent return, and refund, processed before the actual taxpayer has a chance to file.

We had an interesting case where the scammer filed a fraudulent return for 2011, but did not manage to get the refund because the real taxpayer owed the IRS taxes for a previous year. The result was that the IRS wrote the scammer that the refund had been applied to a prior balance due. Too bad, scammer, you lose.

Here’s where it gets really crazy, this same scammer also filed a fraudulent return for the same taxpayer for 2012. Of course, the IRS “retained” that refund also – talk about your “dumb” criminals. Unfortunately, our client is still trying to clean up the mess that these fraudulent returns created.

Recently, a telephone scam cropped up in which the target receives a call informing them that they owe the IRS money and that it must be paid immediately, using a pre-loaded debit card or wire transfer. If the intended victim refuses, the caller threatens arrest, deportation (in the case of an immigrant), loss of business license or driver’s license. The IRS NEVER asks for credit or debit card numbers over the phone.

The IRS never communicates with taxpayers via email, yet many scammers try to dupe people into either making payments or divulging personal information via emails.

Scammers actually use IRS logos, fake IRS letterheads and even can make caller IDs on phone calls appear that they are coming from the IRS.

Some scammers claim to represent other governmental agencies and tell the prospective victim that personal and financial information is required. This method is known as “phishing” and can result in financial devastation if the requested information is provided.

Regarding any of these scams requesting this kind of information, please do a couple of thing to protect yourself: 1) of course, do not respond to the phone call or email, 2) if you think the request could be for real, make a direct contact with the agency or company by going to their web site or making a phone call directly. You might also wish to report the scam to the appropriate agency or company when you do your follow-up.

In speaking with web-savvy colleagues, I have been warned not to open any attachments or respond directly to any emails from unsolicited sources. This even includes emails from such respected sources as PayPal, Amazon, etc., etc. because the mere act of opening the email can put your computer at risk.

I know I occasionally receive emails from such sources indicating that they need some sort of updated information. DO NOT open these emails; rather contact the company directly to determine if the request is genuine.

One part of our practice includes helping people who are experiencing tax problems related to identity theft. If you know someone with this, or any other IRS problem, please feel free to refer them to us. The initial consultation is always free. We need to determine if we can help before it gets into spending money with us.

Remember: We defend our fellow citizens against their government by making sure the IRS obeys the rules.