Pronto Tax Class Blog
How Bad is Tax Identity Theft?
Tax identity theft is truly an insidious and pervasive problem in our modern day environment. In 2013 the IRS was able to stultify up to around $25 Billion worth of fraudulently filed tax returns. The other side of that coin is that same year the government dolled out and exhorbitant $5.2 Billion to non deserving recipients. With the advent of electronic filing coupled with IRS policy of passing out tax refunds as fast as possible, there are certainly not as many avenues to vet the tax return before the money is sent. So althougth this is extremely convienient for the law abiding taxpayer, it backfires in that it also makes it much easier for tax identity thefts to get a refund using somebody else's Social Security Number. This article will take a look at the growing tax identity theft epidemic and discuss preventative measures that can be taken to halt fraudulent tax returns being filed.
Taxpayers Endure Identity Theft Hassle
One of the biggest problems with a person having a return filed fraudulently in his or her name is that the return that gets their first will most likely get the tax refund. So if a theif filed a return under your Social Security Number before you filed yours, you are going to have ensuing complications that could stall you getting your money for possibly more than a year. The tapayer can have their entire life uprooted by the fraudulent filing. Many times the SSN was stolen just as luck of the draw and pulled from a hat, with you being the loser of course. There are measures that can be taken to ensure that in future years the problem does not persist. After an identity theft form is filled out and the IRS has vetted your identity, they will get you your money and send you an ID theft pin number that will protect for the indefinite years to come.
ID Tax Fraud Growing
It is no secret that the tax refund fraud industry is a growth sector. Ironically even the former Attorney General Eric Holder was a victim of tax identity theft. Uncle Sam cannot be positive of how far the crime can reach. The GAO is reporting that the entire extent of tax identity theft's reach cannot be calculated because of the challenges inherent in the crime's detection. They have discovered that the heart of the industry is in Florida.
How Easy is Tax Identity Theft?
One of the biggest reasons that tax fraud is so prevelant is due to the government's desire to return tax refunds at rapid rates. Essentially there are no supporting documents required of the taxpayer when they are filing electronically. The ease and convinience created for the benefit of the law-abiding taxpayer is now being exploited by these fraudulent criminals.
The IRS will eventually catch the fake returns, but by then the money has already been divied out and the problems have now just begun for the innocent taxpayer.
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