When a Thief Steals Your Tax Refund
Posted by Russ Ray on April 15, 2008
In honor of Tax Day, here is some happy news:
Earlier this week, one of my colleagues sat down at her computer to file her income tax return electronically using TurboTax. Twice, her return was rejected. The message she got back was startling: the IRS already had a tax return filed under her Social Security number.
How could this be? She hadn’t filed yet.
Panicked, she called the Social Security Administration to make sure her name matched her Social Security number. It did. Then she called the IRS. A representative pulled up the tax return filed under her name and Social Security number, and asked to verify the address. It wasn’t hers.
A thief had filed a fraudulent tax return under her name, and would likely get her $1,000 refund, not to mention her $600 economic stimulus payment. Thus began her tedious task of clearing her name: filing a police report, filing a complaint with the Federal Trade Commission, putting a fraud alert on her credit report and mailing in her tax return with copies of her driver’s license, police report and other documents to prove her identity. (Read here for steps you should take if you’re a victim of identity theft).
Despite the growing problems, the audit found that the IRS doesn’t do enough to prevent the problem or prosecute those who commit these crimes. It found: “No action is taken to stop someone from continuing to commit employment-related identity theft using another person’s SSN and name. The IRS does not actively try to identify or stop an individual from committing identity theft.”
