Are you looking forward to a tax refund this year? How would you feel if the IRS told you that it had already paid out your refund to someone else?
It happens all too often. The hundreds of billions paid out annually by the Internal Revenue Service in tax refunds remains one of the prime targets for cybercriminals looking to make money from stolen personal identities. They get their information by hacking personal computers and the networks of credit card companies, retailers and tax practitioners, among others, and use the data to file refund claims before you do.
The good news is the number of tax refund fraud incidents is way down in the last several years. The IRS has made a variety of changes to their processing of tax returns and their communications with taxpayers and practitioners that have dramatically reduced the amount of refund fraud. According to the agency, the number of victims of tax-related identity theft fell by almost two-thirds between the 2015 and 2017 tax years.
The bad news is, refund fraud still happens to thousands of Americans annually, delaying the disbursement of billions of dollars in refunds, often for long periods.
“We’ve made a lot of progress on tax return fraud but it’s a game of whack-a-mole in terms of dealing with the issue,” said Eric Smith, a spokesman for the IRS. “The problems never really go away.
“We make a move, and the bad guys make another move.”
While the IRS has had recent success combating tax return fraud, the responsibility to protect personal information begins with taxpayers. Here are four ways to help make sure you don’t become a victim.