The Internal Revenue Service said it is taking additional steps to fight the growing problem of identity theft and tax-refund fraud, including deploying 3,000 employees to fight these cases.
That’s more than double the number of IRS employees fighting tax-related fraud the previous fiscal year.
In addition, the agency said it has trained more than 35,000 employees who work with taxpayers to recognize and provide assistance when identity theft occurs.
Taxpayers can encounter identity theft involving their tax returns in several ways.
One example that represents a growing trend is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.
Tax-related identify theft is growing at an alarming pace. In fiscal year 2012, the IRS Identity Protection Specialized Unit received nearly 450,000 cases, a 78 percent increase over fiscal year 2011.
But the agency has come under fire for lacking an effective strategy to combat the growing problem.
The National Taxpayer Advocate (TAS) issued its annual report to Congress this month and outlined the mounting issue of ID theft and the failure of the IRS to provide rapid and effective help. TAS is an independent organization within the IRS and helps taxpayers resolve problems with the IRS. It also recommends changes that will prevent the problems.
The IRS has established 21 different units to address identity theft cases, each with their own rules and procedures — a strategy that is far from the “centralized traffic cop” function recommended, according to the National Taxpayer Advocate.
Nonetheless, the IRS has vowed to step up and better address tax fraud and ID theft. It is also launching a public education campaign to help taxpayers avoid becoming victims.
Here is a quick guide from the IRS to protect you from becoming a victim of identity theft:
- Don’t carry your Social Security card or any documents with your SSN or Individual Taxpayer Identification Number (ITIN) on it.
- Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
- Protect your financial information.
- Check your credit report every 12 months.
- Secure personal information in your home.
- Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for Internet accounts.
- Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.
The IRS also states that:
If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. – Fri., 7 a.m. – 7 p.m. local time; Alaska & Hawaii follow Pacific Time).
If you receive a notice from IRS and you suspect your identity has been used fraudulently, respond immediately by calling the number on the notice.
If you did not receive a notice but believe you’ve been the victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 right away so we can take steps to secure your tax account and match your SSN or ITIN.