Tax ID Theft Against Seniors Sparks Worry, Action Among Feds

Wednesday, May 01, 2013
Just when you think identity thieves can't sink any lower than robbing children by using their clean credit profiles for criminal purposes, news emerges of an escalating form of identity theft: tax identity theft against senior citizens. Government agencies from the IRS and Federal Trade Commission to the Senate Special Committee on Aging are taking action to fight the problem.

Tax identity theft is a favorite ploy of scammers and criminals. In fact, between 2008 and 2012, tax-related identity theft rose more than 650 percent, according to the IRS Taxpayer Advocate Service. Thieves defrauded American taxpayers of $5.2 billion by filing 1.5 million fake tax returns in 2011, an investigation by the U.S. Treasury Department's inspector general revealed.

Seniors are a favorite target - along with anyone else who doesn't have to file a tax return, such as students, low-income earners and the deceased, according to the Special Committee on Aging.

Seniors who have no income other than Social Security benefits, or whose additional income falls below the taxable threshold, don't have to file a federal tax return. Identity thieves can use that person's Social Security number to file a fraudulent tax return - seeking a refund - without the individual, or the IRS, being aware of the fraud. It can go on for years, or never be discovered at all. Because the crime goes unreported, it's difficult for the IRS to detect - allowing thieves to walk away with billions in fraudulent refunds.

At a senate hearing, Treasury Inspector General for Tax Administration J. Russell George told lawmakers that this year's identity theft data are not yet available, MSN Money reports. "However, it is highly likely that incidents of identity theft will show a continued increase when the current filing season is concluded," he said.

Federal agencies are taking steps to address the growing problem of tax identity theft and ensure seniors have better protection from identity fraud, including:

• In early May, the FTC will host a workshop, "Senior Identity Theft: A Problem in this Day and Age," aimed at addressing areas of identity theft that affect senior citizens. Consumer advocates, government officials and members of private industry are expected to participate and the forum is open to the public.

• The IRS expanded a program that makes it easier for law enforcement in all 50 states and the District of Columbia to obtain tax return data as part of their investigations and prosecution of identity theft cases.

• Multiple federal agencies and departments, from the FBI and IRS, to the FTC and Department of Justice offer extensive consumer information and identity theft prevention advice on their Web pages.

• The IRS has boosted its security efforts, including filters that are used in processing returns.

Senior citizens can take some steps to fight tax identity theft. If you receive an email, text message, instant message or other form of digital communication purporting to be from the IRS, forward the suspicious contact to the IRS at The IRS never uses any form of digital communication to initiate contact with taxpayers. If you receive a letter from the IRS rejecting your return because the service says you already have one on file, contact them immediately. Multiple returns are often an indicator of tax identity theft.

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