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TAX FRAUD: Identity Theft’s Partner In Crime by, Mackinac Partners

The Federal Trade Commission recently reported that in 2015, they received more than 490,000 identity theft complaints—that’s nearly 50% more compared to 2014. Tax fraud is by far the biggest contributor to those numbers. According to the FTC’s Chairwoman, Edith Ramirez, tax refund fraud is the largest and fastest growing segment in the identity theft category.

Tax fraud occurs when criminals use your Social Security Number to file a refund with the IRS in your name. In 2013, identity thieves who filed fraudulent claims using stolen information got away with $5.8 billion. Victims usually only learn of the crime after having their returns rejected because scammers have beat them to it. Filing your taxes right away can help reduce the risk of being targeted for tax fraud. Top Bloomfield Hills business attorneys discuss below.

Recognizing the Warning Signs of Tax Fraud

One of the biggest indicators that you might be a target for tax fraud is when companies or individuals ask repeatedly or pressure you to provide personal information. The IRS does not ask for PINs, passwords or confidential access information, nor does it contact taxpayers via email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media platforms. Additional warning signs include:

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

To combat tax-related identity theft, the IRS, the states and the tax industry joined forces in January of this year to enact new safeguards against tax fraud. However, if you suspect you have been a victim of tax fraud or tax-related identity theft, report it immediately at

Precautions That Help Prevent Identity Theft

  • Always use strong passwords and never use the same password for all of your accounts
  • Install security software with firewall and anti-virus/spam protections on your personal computers and change account passwords often
  • Learn to recognize phishing scams—threatening calls, texts or emails from people posing as legitimate organizations—so you can avoid them
  • Familiarize yourself with the Dirty Dozen, a list compiled annually by the IRS alerting taxpayers to a variety of popular scams
  • Do not click on links or download any attachments from unknown sources or suspicious emails
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know with whom you are dealing
  • Do not carry your Social Security card in your wallet or purse
  • Make sure your tax records and personal data are kept in a secure place
  • Don’t give a business your SSN or financial information just because they ask—only when required
  • Check your credit report every 12 months

Contact Top Bloomfield Hills Attorneys

If you’ve been a victim of identity theft, or have questions about the subject, contact our experienced attorneys at the Cronin Law Firm.

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