This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tax Identity Theft A Growing Problem In The United States

ATLANTA, Feb. 19, 2013 /PRNewswire/ -- When you think of crime, a warehouse full of people on computers might not be your first thought. But this is becoming more commonplace as criminals see the ease and financial gain in tax identity theft—that is, falsifying tax returns to get someone else's refund check. Equifax is sharing tips for consumers on how to avoid becoming a victim of this growing problem.

(Logo: http://photos.prnewswire.com/prnh/20060224/CLF037LOGO )

The Internal Revenue Service has seen a tremendous increase in the number of fraudulent returns filed. As of September 2012, the IRS had identified 641,690 tax-related identity theft incidents from the first nine months of the year. This compares to 242,142 total incidents in 2011 and 47,730 total incidents in 2008.

All it takes for a thief to file a fake tax return is a stolen Social Security number and a fake address. Victims realize their refunds have been stolen after the IRS denies them their rightful check.

However, you can take steps to lessen your risk of becoming a victim to tax identity theft. Tips to help protect yourself include:

  • Keep your personal information safe. Keep documents like your Social Security card, Medicare card and birth certificate in a secure place. Only carry these documents with you when absolutely necessary.
  • File your tax return as soon as possible to beat a potential scammer to the punch. If you file with the IRS first, the thief will be denied when trying to use your Social Security number for a fake return.
  • If filing by mail, take your tax return directly to the post office. Do not leave it in your mailbox where it can easily be stolen.
  • Be especially aware of those who prepare your tax report. Only seek tax preparation services from reputable businesses. Check with the Better Business Bureau.
  • If you wouldn't normally file a tax return because, for example, you are a full-time student with no income, be wary of anyone offering to prepare your taxes so you can receive a refund or "free money."
  • Never sign a blank form that someone else will complete for you.
  • Don't fall for a spam scam. The IRS never initiates contact through email to ask for personal information.
  • Check your credit report regularly. If your personal information has been compromised for tax fraud, it's possible that identity thieves will commit other types of identity fraud with this information, such as opening credit card accounts in your name. Consumers can request a free credit report from each of the three credit reporting agencies each year at www.annualcreditreport.com.

"The best defense against identity theft of any kind is to be vigilant in the protection of your personal information," said Trey Loughran, president of the Personal Solutions unit at Equifax. "It can take many months for a victim of tax identity theft to finally get his or her rightfully owed refund check."

If the IRS denies your tax return because you've been a victim of identity theft, there are steps you can take to get your rightful return. First, file a report with the police. Next, file a report with the IRS Identity Protection Specialized Unit by calling 1-800-908-4490, and sign an identity theft affidavit.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,243.52 +86.67 0.51%
S&P 500 2,008.67 +7.10 0.35%
NASDAQ 4,583.5440 +21.3550 0.47%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs