Even if you missed the poorly-acclaimed 2013 comedy starring Jason Bateman and Melissa McCarthy, you need not look very far to find examples of identity theft. It is in the news quite a bit, and whether it is Social Security numbers that have been leaked, bank information, or other personal data, identity thieves are out in full force.
A common ploy is for a fraudster to file erroneous tax returns under another person’s Social Security number, claim a refund, and have that refund directly deposited into the fraudster’s bank account, reloadable debit cards, or other type of account. This creates inconvenience and consternation for the victims, but fortunately, the IRS takes these cases quite seriously and has a very good track record of conviction. The IRS Criminal Investigation (CI) unit recently released its largest prosecutions of 2015.
The 10 largest prosecutions of 2015 involved 46 perpetrators who ended up with an average of six years in prison, ranging from probation for those tangentially involved in a large ring to 27 years for the leader of a husband and wife tandem who stole $3,000,000.
The fraudsters that were part of these largest prosecutions attempted to claim refunds in aggregate of $44 million, receiving $25 million. These 10 cases claimed over 20,000 victims, for an average attempted refund of $220 per victim and $125 in refunds received per stolen identity.
According to the IRS report, in the four years that they have opened up a specific office to fight this form of identity theft, they have received leads related to “approximately 1.72 million returns with over $11.4 billion in refunds claimed.”
A few takeaways from this:
- If you try to file your properly-prepared return electronically and are not able to, it is possible that someone has already filed under your Social Security number to claim a fraudulent refund. If this has happened, you can get a PIN from the IRS so that you can securely file your return without the threat of someone filing on your behalf.
- If you are due a refund and your return has already been fraudulently filed, you will still get your refund. The perpetrators of this fraud are not stealing money from you, they are stealing money from the government.
- Social Security numbers and wage information are highly sensitive pieces of information. Anyone who gets their hands on this information may not simply be content to file fraudulent returns; they may also open credit cards in your name and use your credit history to their benefit. Reviewing your credit report on a consistent basis will help nip these thieves in the bud.
If you have questions or concerns about the security of your personal or corporate identity information contact one of our professionals today.
By Dan Massey, CPA, Manager