The United States, Internal Revenue Service (IRS) identifies and refers to identity theft tax refund scam as the No. 1 fraud of the year, always coming into light when the tax season is in full spring. Over the years, government have looked into possible measures that will be proactive in stemming this dangerous tide but it seems the identity tgives are sometimes, one step ahead of the agencies. We will take a look at the anatomy of this scam and how it is perpetuated, what to do in cases of these nature and how to preserve one’s self from identity thieves.
Anatomy of the fraud
Identity theft tax refund scam, a growing epidemic in the society occurs when another individual lays hands on your Personal Identifying Information (PII) for example;name, social ecurity number and other identifying information and using this, they commit tax refund fraud. This tax refund fraud will include using a legitimate taxpayer’s identity to file a fraudulent tax return and claim a refund in their name. So, when the legitimate owner files for a tax refund, the IRS sends him a message that the refund has been made already.
The identity thief will usually file the tax returns early enough and get the tax refunds early too, so that before the legitimate owner comes into the picture, they are long gone with their loot.
Financial Implications of Identity tax fraud
More then just making away with your tax refund, an identity thief with your personal identification information, can obtain credit cards in your name, take loans or mortgages, in fact pile up debts that will taint your credit history and make it harder for someone to navigate through the murky waters of debt.
Too, the government have spent billions of dollars in repaying tax refunds that have become n snatched away by identity tax thieves . This amount runs into huge money that could have been spent on more productive ventures. If you are contacted by the IRS or your tax adviser over : more than one filed tax return using your SSNor IRS records shows you have received salary from an employer for whom you did not workfor ,then you are most probably a victim of this scam. Learn more.
What to do next
If by any means, you suspect being a victim of identity tax refunds fraud then, youust report to the Federal Trade Commission, contact any of the major credit bureaus to place a ‘fraud alert’ on your credit record and reach out to your financial institutions,to close any financial or credit accounts opened without your authorization or compromised by the identity impersonators. If your SSN data have been breached, waste no time in contacting the IRS and fill the Identity Theft Affidavit,”IRS Form 14039″.
Prevention, they say is better than cure. Hence, protecting your personal identification data from identity theft is will help the IRS and State inhibit the spate of tax refunds theft. Protect your social security cards and tax records jealously.Always use security software with firewall and anti-virus protection and strong passwords too. Also learn to recognize phishing mails and fraudulent texts and calls posing as financial institutions.
The ripple effect of tax refunds fraud leaves no one unaffected, this establishes why we must join hands with state agencies to prevent identity thrives from plundering with our commonwealth. For more details, visit: https://www.taxreturn247.com.au/how-it-works