Identity theft and fraudulent tax returns

The US Internal Revenue Service has increased its attempts to remedy fraudulent practices, including identity theft. Between 2011 and November 2013, the IRS has blocked 14.6 million suspicious returns and saved more than $50 billion in fraudulent refunds. The average sentence for tax fraud is 38 months and the maximum sentence is 26 years. [IRS.gov, 2014].

Increasingly, fraudulent tax returns are closely related to the increase in all types of fraud in the United States. As with any type of identity theft, most people realize this long after the crime has occurred. If a fraudulent tax refund is submitted, how do taxpayers or businesses know? You should be aware of the danger signs of fraudulent returns.

• Income that is disproportionate to spending.
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  • Hidden assets
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  • Living Standards Exception Reported Income.
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  • There are two sets of books and records
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  • Destroy books and records - these records cannot be found or generated on demand
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  • Fictional or false records in books and records
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  • Fictional invoices or bills
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  • Copy of invoice
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  • Disproportionate billing discounts
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  • If you are a victim of identity theft, you can apply for a federal PIN from the IRS. If you have not become a victim, you can still get a PIN.
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  • The IRS does not send emails. Any message may be fraudulent and you should not disclose any information in response.
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  • Refuse to provide your social security number without providing
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  • Shred the file with any personal information before processing the file
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  • Store all sensitive documents [such as tax returns] in a locked file.
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  • Keep your computer's anti-malware and virus programs up to date.
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  • Do not send any type of personal information via public Wi-Fi, such as the type of cafe or hotel lobby.
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  • The tax return rejected by the IRS indicates that the social security number has been used, which is a potential indication that fraudulent returns have been submitted.
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  • The US Internal Revenue Service has notified that it is another trick for fraudsters to report that the income of an employee you do not know is not reported.
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  • Companies that receive notifications from the IRS about employees they do not have may be signs of fraud.

What do you do if you are a victim of identity theft?

1. Submit a report to the local police.

2. Report identity theft to the FTC at http://www.identitytheft.gov or by calling 1-877-438-4338, TTY 1-866-653-6261.

3. Contact a credit agency to issue a fraud alert in your credit report:

Equifax online report or 1-800-525-6285
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  Experian online coverage or 1-888-397-3742
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  Transunion online report or 1-800-680-7289

4. Close any accounts opened by fraud.

5. Document Form 14039, The Identity Theft Affidavit and the IRS. This allows taxpayers to add indicators to the tax records of suspicious activity.

These measures do not guarantee that you will not be a victim of identity theft or fraudulent tax returns, but education is the best form of prevention. Help eliminate fraud by following the above ideas.

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