Tax Identity Theft Trends

It has been two and a half months since I discovered that my identity had been stolen and used for a fraudulent tax return, and the saga continues.

I received a letter in the mail from the IRS stating they could not process my request for information. 2 identical letters in the same day from IRS, very non-specific and confusing. I contacted the IRS identity protection special unit who said it was to inform me they cannot cash the fraudulent check I turned over to them. They instead contact the bank who issued the check to inform them to return the funds. Would have been more helpful if they could have just said that   (thank you non-specific government form letters). Still have not received letter from them confirming the identity theft case investigation, apparently they are behind from such high volumes. 😔

The next week I received word from my employer that there was an internal breach via phishing email scams where over 60 employee online accounts that contain our personal and financial information were accessed in late hours from IP addresses in the United States and Poland. These email phishing scams pretend to be from other employees in the organization to steal log in credentials/passwords. I never provided my username and password to anyone and nothing was found on my computer. 8 others have reported tax fraud so far. At least we will have identity protection services offered for free. 

Credit reports still fine. No criminal record tied to my name (I know because I got pulled over and had no issues + got out of a ticket 😋 ). Trying to remember seeing suspicious emails or other explanation of why I became victim...still don't know for sure.

I then read a news article about a very similar story with Ball State University Employees-many who had fraudulent return checks also sent to them. Highly educated and high ranking executives, very similar to the victim trends at my organization. Wouldn't it be interesting to compare information, systems, and facts? Wish I was a detective and my employer would let me discuss with the FBI working with them...

Some people's fraudulent returns made them owe, and the refunds are getting to the victims. What's the motive? Are  these stupid cyber thieves? A hacker program flaw? Something else? Still millions of SSN's from deceased people being used to file fraudulent returns as well. Billions of our tax dollars..stolen. Is this even a government priority, or drop in the bucket compared to other financial crimes?

I welcome any other stories about your experiences; or even from a hackers perspective...what is the motive if not just to steal from our government and make hard working, innocent tax payers stress?

My Identity Theft Story

Jokes on you identity thief-you have messed with the wrong girl! While I may never know who you are, how you got my info, and what else you may have done with it, I take comfort in knowing that you did not get any of my money or effect my credit...yet.

This all started two weeks ago when I went to file my taxes. I use online tax preparation software to complete and file my own taxes, however this year I received an alert that my federal return was rejected due to one already being filed for the year. Of course I filed on the weekend and it is impossible to speak to anyone from the IRS on the phone (ever but especially on a weekend when the government ceases to operate)  so I had to wait till Monday to try and figure out what was going on.  Thank goodness the private credit monitoring agencies take calls on the weekend to immediately place a fraud alert on my account!

When I went to the local IRS office Monday, I learned that a thief beat me to it by 2 days and used all of my information including my name, address, SSN, employer info, and my exact wages as reported on my 2013 tax return. So far all seems legit to IRS, however digging deeper they filed as a single (I have joint filed with my husband for past 9 years), and itemized with excessive deductions compared to the standard deduction I claim every year. The refund was a few thousand more than I have ever received. The refund had not been issued yet, but when I returned the next day with all necessary proof of identity, identity theft affidavit, and signed tax return the refund had already been processed. Way to go IRS!  Even better, their investigation won't event start for 45-60 days while I will be lucky to get my actual return in 6 mos to 1 year. Good thing I don't count on this refund for anything in particular.

Fast forward 2 weeks, numerous hours/days spent investigating and working diligently to protect my identity/finances and I get a check in the mail for $4000 for my federal return from a bank in California. They were "unable to deposit funds into the account provided" so check was mailed to my address (that the thief was stupid enough not to change). I was able to log on to the Santa Barbara Tax Products Group site that the check stated prepared the return, and learned that turbotax products were used to file and refund bonus loaded on Amazon gift card. I am still waiting for Santa Barbara  tax product group to return my phone call.  Thank you turbotax and every other tax prep service that offers rapid refunds and incentives for using their products. These untraceable prepaid Visa cards and gift cards are what the IRS referred to as "a criminal's candy". So why are they allowed? Why are tax prep services able to take our federal tax money from the US Treasury to put in their bank account to subtract their fees then issue remaining funds to the taxpayer?

Why can't the IRS have a better system for flagging suspicious returns? I would think reporting the exact same salary to the dollar two years in a row would seem strange plus extreme itemized expenses not previously reported. Just goes to show how outdated their systems are and the impact of political and social pressure for quick returns.

I am working with my state senators to bring awareness to these and many other issues identified to help prevent another $5.2 billion (the amount reported in 2013) of our honest tax dollars being issued to thieves via fraudulent tax returns.

The IRS will not share any details about their investigation or the results of it to me. They claim this is to protect me since I could be a suspect...really? I have been an honest taxpayer and I don't even get the closure of knowing the results of the investigation? I signed the fraudulent check over to them to put back into the Treasury. They did not know what to do when I brought it to them, apparently that is either rare or even more rare that a person is honest enough to not cash a check for a free $4k. My brother suggested I double down, however this girl doesn't look good in orange and could never be that dishonest.

For those who are free from ID theft...I hope it stays that way, however be prepared that it can happen to anyone! This does not just happen to people who fall victim to phishing scams, stolen wallets, and computer viruses. We have little to no control over the wealth of information that is in our employer databases, insurance exchanges, and the IRS systems. Cyber threats are pervasive, and efforts to mitigate are retrospective.

Here are some actual useful tips:
1. File your taxes as early as possible! Thieves try to file as soon as possible to beat you to the punch (can file as early as 1/20 pending you are rare enough to actually have your W2 by then)
2. If you learn you are a victim, call one of the credit monitoring bureaus to place fraud alert on your credit. Access your free credit report.

Equifax, www.Equifax.com, 1-800-525-6285

Experian, www.Experian.com, 1-888-397-3742

TransUnion, www.TransUnion.com, 1-800-680-7289

3. Find a local IRS office...you will lose your mind trying to do this over the phone! http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-
4. Contact federal trade commission and report identity theft. 1-877-438-4338
5. Do not waste your time at the social security office...they don't even have a form to file and only issue new SSN If there has been physical harm.
6. Remain calm and utilize tax advocacy services and the support from your legislators.