Identity Theft and Tax Fraud – Are You a Victim?
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Identity theft and tax fraud are serious problems that continue to increase in number and complexity as each tax season rolls by. Don’t think you will ever be affected? Accounting Today recently reported that the IRS identified 775,723 tax returns with $4.6 billion claimed in fraudulent refunds, as of April 30, 2011. The good news – the IRS prevented the issuance of $4.4 billion (96%) of those claims which is an increase of 171% over the previous year. Unfortunately, 4% of those victims were not so lucky.
Becoming a victim of identity theft and tax fraud can cause great hardship for you and your family. The Miami Herald recently wrote about a Miami Shores family who are struggling with the IRS to obtain their $8,000 tax refund after falling victim. Indeed, my colleagues and I have witnessed many falsified returns this past tax season, and although the IRS has implemented the IRS Identity Theft Program, there is no quick and easy solution to overcome this unfortunate circumstance. While there is no guarantee that a thief won’t steal your identity, there are certain precautions you can take to prevent becoming victimized:
- Safeguard your personal information
- Monitor your credit report
- File early
- Respond immediately to IRS notices
If you have questions about preventing identity theft and tax fraud, or if you have already been targeted and need assistance, please contact me at sberger@kaufmanrossin.com or 561.620.1722.
Scott Berger, CPA, is a Entrepreneurial Services Principal at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
4% is already a low number compared to fraud in other countries but it really is important to know how to avoid being in the 4%