IRS makes changes to avoid income tax fraud
CROMWELL — Connecticut Better Business Bureau is urging taxpayers to take measures to protect themselves from income tax fraud, which is a huge criminal enterprise involving billions of dollars a year in losses.
“Income tax fraud is essentially the result of identity theft,” according to Connecticut Better Business Bureau spokesman, Howard Schwartz. “All a criminal requires to steal your tax refund is your name, date of birth and Social Security number.”
With that information, someone can file an income tax return in your name and divert your refund to their own account. Law enforcement reports some income tax theft operations had dozens of refunds sent to the same addresses. To address the problem, the Internal Revenue Service (IRS) has put new policies and procedures into place to prevent that from happening, and trained thousands of customer service employees to assist victims.
The clock is ticking for taxpayers to file their returns before criminals do. This year, the IRS will begin accepting returns as of January 19th, with a deadline of April 18th.
Signs that you are an income tax theft victim include:
- Having your income tax return rejected by the IRS because it was already filed
- Not receiving a refund
- Owing additional taxes for unreported income
- Suspicious activity in your credit report
BBB has some tips to help you reduce the chance that you will become a victim:
File now if you can – This is not always possible for everyone, because many are waiting for their W2 paperwork however, the sooner you file the better.
File electronically – If a refund is due you can get your refund in less than a month by efiling and request that your refund be deposited directly into your account.
Use ID theft prevention measures – One of the most important is to not carry your social security card with you and don’t give it out just because a business or professional asks for it.
In addition, don’t carry your Medicare card unless you’re going to a doctor for the first time. In the event of an emergency, hospital personnel may not refuse to treat you even though you don’t have your card. However, you will need to provide billing information upon discharge.
The IRS will never call you – Ignore any threatening phone calls from someone who claims they work for the IRS, that you owe back taxes and that you will be arrested if you don’t pay up immediately. The IRS will never call or email you to ask for personal information.
Check your credit report – You may do so free of charge at the government-sanctioned website AnnualCreditReport.com, or by calling 877-322-8228. You will be asked for your Social Security number and date of birth for authentication purposes.
If your Social Security number is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends:
- Responding immediately to any IRS notice; call the number provided or, if instructed, go to irs.gov.
- Completing IRS Form 14039, Identity Theft Affidavit, if your return is rejected because of a duplicate filing under your SSN or you are instructed to do so. Use a fillable form at gov, then attach the form to your return and mail according to instructions.
- Continuing to pay your taxes and file your tax return until the problem is resolved.
If you previously contacted the IRS and did not have a resolution, you can now get special assistance at 1-800-908-4490.
You will find additional information on the Internal Revenue website at https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft, as well as procedures to report suspected tax fraud activity.