Tax Day and Identity Theft

[Editors Note: This story was orginially written by Al Sunshine for the current edition of RTDNA, a media organization newsletter. It is likely that every media outlet will report on this year’s tax day. Falling back on his 40 plus years as a consumer investigative reporter, Al offers these suggestions for todays’ journalists to consider when doing tax stories this year and keeping YOU from becoming a victim.]

It comes every year and can’t be easily ignored: The Federal Tax Deadline. It used to be an easy enough story to cover: Check with the PIO’s at the Post Office, see what postal branches were open late to accept last-minute returns, make a full screen showing their addresses for the early shows and maybe talk to a PIO about how busy they expect to be.

Work a little harder, and get a quick soundbite from the IRS on how taxpayers can get their last-minute tax questions answered.

Come 11PM, go live from the Post Office parking lot showing last minute filers dropping off their tax returns to the drive-thru mailbox and ask then why they waited until the last minute to file.

Quick and Easy.

But then it got a little more complicated….

Online filing with home computers took over and suddenly nobody needed to rush to the Post Office before the midnight deadline anymore: No more long lines for the Live Shots.

Last minute filers could finish up their e-filing at home and send in their returns without being exposed to reporters embarrassing questions or glaring cameras.

But that opened the door to a whole new set of problems that weren’t as easy to cover as going to the Post Office at the last minute: Tax Refund Identity Theft.

It’s the new cyber-age equivalent of making up a tax return in somebody else’s name using fake tax documents, phony-up the numbers to show a fat tax refund and get a debit card sent to a post office box.

How successfully has that scam worked the past few years?

In 2012, the IRS’s Inspector General estimated Phony Tax Refund Scams potentially added up to more than $5 billion dollars.

What does it mean to your viewers, why should they care or you?

Because in almost all cases, the legitimate taxpayer doesn’t find out they’ve been ripped-off until they file their returns and have them rejected as “Duplicates” by the IRS: The crooks filed phony return in their names first, and the legitimate Taxpayer’s Tax Return was rejected by the IRS’s computers!

South Florida is one of the worst places in the country for Tax Refund Scams. It’s  not hard to find friends who had their Tax ID’s ripped off, and their legitimate Tax Refunds delayed for years!

Ask a few questions on Social Media like Facebook, and you’ll have no trouble finding angry victims.

Here’ what the Feds suggest on several of their very busy websites:

Know the warning signs

Be alert to possible tax-related identity theft if you are contacted by the IRS or your tax professional/provider about:

• More than one tax return was filed using your SSN.
• You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return.
• IRS records indicate you received wages or other income from an employer for whom you did not work.

Steps to take if you become a victim

If you are a victim of identity theft, the Federal Trade Commission recommends these steps:

• File a complaint with the FTC at Identity Theft.gov.
• Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
  • Equifax, www.Equifax.com, 1-800-766-0008
  • Experian, www.Experian.com, 1-888-397-3742
  • TransUnion, www.TransUnion.com, 1-800-680-7289
• Contact your financial institutions, and close any financial or credit accounts opened without your permission or tampered with by identity thieves.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:

• Respond immediately to any IRS notice; call the number provided or, if instructed, go to IDVerify.irs.gov.
• Complete IRS Form 14039, Identity Theft Affidavit, if your efiled return rejects because of a duplicate filing under your SSN or you are instructed to do so. Use a fillable form at IRS.gov, print, then attach the form to your return and mail according to instructions.
• Continue to pay your taxes and file your tax return, even if you must do so by paper.
• See Publication 4524, Security Awareness for Taxpayers, to learn more.
  
  The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

And here’ one more quick tip: Know your tax preparer and the company they work for.

The IRS tried registering Tax preparers to weed out potential white collar criminals and felons several years ago.

But following a formal protest from the Industry and a legal challenge, the IRS’s Tax Preparer Registration plans were dropped.

Helpful Links:

https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

https://www.treasury.gov/tigta/auditreports/2015reports/201540026fr.pdf