WASHINGTON — Even though reports of tax-related identity theft
have declined markedly in recent years, the Internal Revenue Service warns that
this practice is still widespread and remains serious enough to earn a spot on
the agency’s annual “Dirty Dozen” list of tax scams.
The Dirty Dozen is compiled each year by the IRS and outlines a
variety of common scams taxpayers may encounter any time during the year. Many
of these cons peak during filing season as people prepare their tax returns or
hire tax professionals.
Tax-related identity theft occurs when someone uses a stolen
Social Security number or Individual Taxpayer Identification Number (ITIN) to
file a fraudulent tax return claiming a refund.
The IRS, the states and the tax industry began working together
in 2015 as the Security Summit to fight tax-related identity theft. Security
Summit partners enacted a series of safeguards that are making inroads against
identity thieves.
For example, the number of taxpayers reporting themselves as
identity theft victims declined by 40 percent in 2017 from 2016. In 2017, the
IRS received 242,000 reports from taxpayers compared to 401,000 in 2016. This
was the second year in a row this number fell, dropping from 677,000 victim
reports in 2015. Overall, the number of identity theft victims has fallen
nearly 65 percent between 2015 and 2017.
Because of these successes, criminals are devising more creative
ways to steal more in-depth personal information to impersonate taxpayers.
Taxpayers and tax professionals must remain vigilant to the various scams and
schemes used for data thefts.
Business filers should be aware that cybercriminals also file
fraudulent Forms 1120 using stolen business identities and they, too, should be
alert.
Security
Reminders for Taxpayers
The IRS and its partners remind taxpayers and tax professionals
that they can do their part to help in this effort. Taxpayers and tax
professionals should:
- Always use security software
with firewall and anti-virus protections. Make sure the security software
is always turned on and can automatically update. Encrypt sensitive files
such as tax records stored on the computer. Use strong passwords.
- Learn to recognize and avoid
phishing emails, threatening phone calls and texts from thieves posing as
legitimate organizations such as banks, credit card companies and
government organizations, including the IRS. Do not click on links or
download attachments from unknown or suspicious emails.
- Protect personal data. Don’t
routinely carry a Social Security card, and make sure tax records are
secure. Treat personal information like cash; don’t leave it lying around.
The Security Summit has worked to increase awareness among
taxpayers and tax professionals about tax-related identity theft and security
steps through its “Taxes. Security.
Together.” and “Protect
Your Clients; Protect Yourself” campaigns.
The IRS understands that reversing the damage caused by identity
theft is a frustrating and complex process for victims. While identity thieves
steal information from sources outside the tax system, the IRS is often the
first to inform a victim that identity theft has occurred. The IRS is working
hard to resolve identity theft cases as quickly as possible. For more
information, see the special identity theft section
on IRS.gov.
Related
Items:
- Identity Theft Guide for Business Partnerships,
Estates and Trusts
- IRS
Security Awareness Tax Tips
- Key IRS Identity Theft Indicators Continue Dramatic
Decline in 2017
Are you
in Trouble with the IRS?
Successful Civil and Criminal Tax Representation Selig & Associates practices before the Internal Revenue
Service (“IRS”) the New York State Department of Taxation and Finance
(“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense
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