We’ve already told you about tax time identity theft dangers, but with yesterday being the official deadline for filing tax returns, Americans need to know about some specific tax day identity theft incidents that have occurred in the past. First, our Irvine shredding company will cover some general possibilities regarding tax fraud identity theft:
- Tax preparers who commit larceny
- Postal employees who can be bribed to hand over sensitive material
- Fraudulent e-mails that claim to be from the IRS
The point of these activities is to obtain and use other people’s Social Security numbers, either for credit fraud or filing fictionalized tax returns. They will even steal the Social Security numbers of children so they can declare them as dependents. Stealing the social security numbers of children: another reason we are so passionate about promoting document shredding in California.
Here are some more specific examples of tax fraud identity theft: On Jan. 31 of this year, the IRS and the US Department of Justice (DOJ) conducted a nationwide sweep that targeted 105 people in 23 states. According to the DOJ, the effort included indictments, arrests, and the execution of search warrants related to the potential theft of thousands of identities and taxpayer refunds.
Around the same time, the IRS visited check cashing operations and other non-banking money services to confirm that those businesses are not involved in the fraudulent refund business. These visits took place in what were identified as “high risk” locations, such as Atlanta, Chicago, Los Angeles, New York, Phoenix, Tampa, Birmingham (Alabama) and Washington, DC.
During the crackdown, the IRS discovered that the problem is multi-faceted. Undercover law-enforcement agents in New Jersey were believed to be in the business of filing phony tax returns, while at the same time, a mail carrier agreed to provide addresses located along his route in Somerset, N.J., and to divert the resulting tax-refund checks from the main stream, in exchange for a kickback. Meanwhile, tax preparers in Alabama were pleading guilty to filing false claims, wire fraud, and aggravated identity theft. The DOJ reported that one tax preparer operation used the names, Social Security numbers and birthdays of various victims to file false tax returns, which were directed to bank accounts and debit cards that the criminals controlled.
It’s almost too much to wrap your head around. However, tax time identity theft problems can be minimized when tax filers protect their information – by hiring tax preparers they trust, directing returns to their own bank accounts (rather than cashing tax refunds at a check cashing operation), and shredding any excess copies of tax returns (with or without the help of our Irvine shredding company). Keeping a digital copy is the best way, and it can always be printed later.