Consumer Law

Identity Thieves Target Tax Returns

By M. Stan Herring

We wanted to warn Alabama Consumers on the latest target for identity thieves. Apparently, they are now even so bold as to use the IRS to unwittingly commit identity theft on consumers. We recently came across a great article alerting us to this practice in the Wall Street Journal.

The article found that the IRS and FTC are reporting growing numbers of victims complaining about identity theft related to their tax returns. Apparently, they are seeing two types of fraud. The first is where someone uses your private information to file a return in your name and then either tries to get the refund or take out a loan against the refund. The second is where someone uses your information to obtain a job, then files a return with your personal information on it. When you go to file your actual tax return, the IRS believes that you have already filed causing all sorts of headaches.

In regards to actual numbers, the article noted that "the Federal Trade Commission received 20,782 complaints on tax-related identity-theft issues in 2007, up from 15,442 in 2006 and 8,041 in 2003." However, an IRS representative stated that she "believes those numbers 'significantly understate' the size of the problem and the number of taxpayers hurt by it because, she says, the agency doesn't have a comprehensive method of tracking the various types of identity-theft cases."

Full post as published by Alabama Consumer Blog on March 18, 2008 (boomark / email).