A young mother tries to file her tax return and is told that someone has already filed in her name—and collected the refund check.
A banker receives his annual Social Security Statement and discovers income reported under his Social Security number (SSN) for a job he never worked.
A retired grandfather gets an email that looks like it’s from the IRS directing him to submit personal information for a faster return.
And that’s just the beginning of their troubles.
It would be the perfect setup for a stand-up comedy routine—something about death and taxes—if tax-related identity theft weren’t a serious problem affecting tens of thousands of Americans every year. For some it’s the prolonged hassle of dealing with the IRS; for others the initial fraud is just the tip of the iceberg as they find credit cards, employment records and myriad other financial and legal documents forged in their names.
Tax-related identity theft usually takes one of three forms:
- Armed with a name and SSN, a thief submits stolen information with bogus W-2s to collect a tax refund in the victim’s name. The IRS spotted and stopped 23,000 of these incidents in 2009, the last year for which numbers are available.
- An identity thief uses stolen information to get a job, creating a headache—and financial liability—for the victim when the government wants taxes on income the victim never earned. There were 24,000 such cases reported in 2009.
- Through fake IRS and accounting websites, fraudsters con unsuspecting taxpayers—who think they’re filing returns—into submitting personal information. More than 3,000 of these sites were shut down in 2009 alone.
From the victim’s perspective, dealing with the IRS to clear up matters can be just as bad as the crime itself. Victims often speak of delays, blown deadlines and a maddening silence while the cases drag on—seemingly for eternity.
“It’s frustrating and irritating,” said one recent victim who waited nearly six months for a refund check, only to find it was cashed by con artists three months earlier, four time zones away. “It’s a big bureaucracy, thousands of people, and it feels like they all just shrug their shoulders. You’re just a little person.”
Fraud resolution experts at CyberScout say it can be a tedious, slow process.
“We’ve noticed a pattern over the years,” CyberScout fraud specialist Vicki Volkert said. “It takes about six months for victims to get their money back.”
After the IRS has confirmed a case of identity theft, there can be months of bureaucratic silence while the investigation is pending—which is enough to drive any taxpayer crazy.
“Patience,” Volkert advises anyone in this situation. “Have lots of patience.”
One victim contacted the IRS when his refund check never arrived and discovered that a fraudster had already collected his money. He established his identity with the IRS and was told a new check would be cut in 30 days. Thirty days later, they said another 30 days, then another 30 days. Almost six months later, he’s still waiting 30 days.
His advice: “Act immediately. If you don’t get your refund on time, find out why. If you get a letter from the IRS and it’s anything questionable, call them immediately. Find out what the reason is right away.”
Sometimes showing up in person is the easier, softer approach.
“The IRS has walk-in offices in most cities, and that’s sometimes a better bet than trying to call,” said CyberScout fraud specialist Kennetha Gwin. “On the phone you can get put off and put off, so I’d suggest finding a walk-in center to speak to someone in person. They’ll hand the forms right to you. You’ll get everything you need right there.”
No matter how serious the fraud or how you choose to address it, be patient but persistent—and be prepared to wage a full-scale campaign to get your money back and clear your name. See our tips on handling tax-related identity theft and how to contact the IRS to report fraud.
© CyberScout, LLC. All Rights Reserved.