Identity Thieves Target Tax Returns


We wanted to warn Alabama Consumers on the latest target for identity thieves. Apparently, they are now even so bold as to use the IRS to unwittingly commit identity theft on consumers. We recently came across a great article alerting us to this practice in the Wall Street Journal.

The article found that the IRS and FTC are reporting growing numbers of victims complaining about identity theft related to their tax returns. Apparently, they are seeing two types of fraud. The first is where someone uses your private information to file a return in your name and then either tries to get the refund or take out a loan against the refund. The second is where someone uses your information to obtain a job, then files a return with your personal information on it. When you go to file your actual tax return, the IRS believes that you have already filed causing all sorts of headaches.

In regards to actual numbers, the article noted that “the Federal Trade Commission received 20,782 complaints on tax-related identity-theft issues in 2007, up from 15,442 in 2006 and 8,041 in 2003.” However, an IRS representative stated that she “believes those numbers ‘significantly understate’ the size of the problem and the number of taxpayers hurt by it because, she says, the agency doesn’t have a comprehensive method of tracking the various types of identity-theft cases.”

To give a specific example, the article noted

In one recent case in Pensacola, Fla., Holly M. Barnes, a former Girl Scout troop leader, was sentenced to 10 years in federal prison after pleading guilty to multiple counts of identity theft and filing “false and fictitious” claims for tax refunds, according to the U.S. attorney for the Northern District of Florida. Ms. Barnes created a bogus Girl Scout medical-release form to get sensitive information, including children’s Social Security numbers, the U.S. Attorney’s office said. She then used the information to prepare and file electronic federal income-tax returns using the screen names “Hotmama983” and “Freewoman74.”

Regardless of whether you have been the victim of either kind of identity theft or fraud, once you discover this you should act quickly to repair the damage. This can be a long and time consuming process. To get started, please read our article on our website about identity theft and to begin repairing your credit and good name, this article on correcting reporting errors.

If you are unable to correct these errors or clear your good name, please contact us so that we can help you.

Another resource for you is to join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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