Not too long ago, victims of IRS tax-related identity theft faced a less than sympathetic IRS. Today, the IRS not only provides advice and assistance to victims of tax identity theft, but the IRS also has mounted a national crackdown on refund fraud and identity theft. Last year the federal agency had 2,400 enforcement actions against identity thieves.
Last year the Federal Trade Commission statistics showed a 70% increase in 2011 compared to 2010 for tax and wage identity theft. Tax and wage identity theft primarily reflects fraudulent tax returns filed in the name of the identity theft victim, where the identity thief obtains the tax refund belonging to the victim.
Today, the IRS announced a massive national sweep in recent weeks targeting identity theft suspects in 32 states and Puerto Rico, which involved 215 cities and surrounding areas. This recent push is after last year’s enforcement efforts that helped the IRS protect $20 billion of fraudulent refunds including those related to identity theft, compared to $14 billion in 2011.
By late 2012 the IRS assigned more than 3,000 of its employees, more than twice those assigned in 2011, to work on identity theft related issues. . IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS has trained 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.*
Joe Campana, an identity theft and fraud prevention consultant, said, "This is quite a change from victim stories I heard of several years ago, when victims said the IRS told them, 'Identity theft! that’s your problem; our job is to collect the tax you owe.'"
“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” said IRS Acting Commissioner Steven T. Miller. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible.”
Taxpayers can encounter identity theft involving their tax returns in several ways. One instance 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.*
To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.*
If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.*
*Some statements in this article are excerpted verbatim from a Press Release IR-2013, February 7, 2013