Feature Article
Mark Pribish
Be Aware of Taxpayer ID Theft in 2012
By Mark Pribish
Vice President and ID Theft Practice Leader

As I received my W-2 last week, along with millions of people throughout the United States in accordance with the federally-mandated January 31st deadline, it reminded me of how the IRS has created a Taxpayer Guide to Identity Theft (View the guide here).

This IRS Taxpayer Guide outlines a detailed response to the following four questions:

  1. How do you know if your tax records have been affected?
  2. What to do if your tax records were affected by identity theft?
  3. How can you protect your tax records?
  4. How can you minimize the chance of becoming a victim?

While I have written about this in the past, I believe it is important to remind everyone of how Taxpayer Identity Theft has increased exponentially over the last three years.

According to the May 2011 GAO Taxes and Identity Theft Report, Taxpayer Identity Theft increased to 245,000 identity theft incidents in 2010; up from 169,087 incidents in 2009 and 51,702 incidents in 2008.

Two common examples of Taxpayer Identity Theft include:

  • Refund Fraud when identity theft harms innocent taxpayers through refund fraud where an identity thief uses a taxpayer's name and Social Security Number (SSN) to file for a tax refund before the IRS discovers the fraud and after the legitimate taxpayer files.
  • Employment Fraud when identity theft harms innocent taxpayers through employment fraud where an identity thief uses a taxpayer's name and SSN to obtain a job. When the thief's employer reports income to the IRS, the taxpayer appears to have unreported income on his or her return, leading to enforcement action.

According to the IRS Taxpayer Guide to Identity Theft, taxpayers should be alert to identity theft if you receive an IRS notice or letter that states any of the following:

  • More than one tax return for you was filed
  • You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return
  • IRS records indicate you received wages from an employer unknown to you

If you believe you are a victim of Taxpayer Identity Theft, you can contact the IRS at 1-800-908-4490 and complete the IRS Identity Theft Affidavit, Form 14039.

If you receive a suspicious email or believe you have received an online phishing scam you can call 1-800-366-4484 or report it to the IRS at phishing@irs.gov.

It is also very important to remember that the IRS does not initiate contact with taxpayers by email to request personal or financial information.

Finally, to learn more about identity theft below are some helpful federal government resources:

To learn more about these threats and how to protect yourself and your family from Identity Theft, you can read my past newsletters at the Merchants Identity Theft Educational Website at www.idtheftedu.com.


Scam Central

Phony Phone Calls

Over the years, some of us may concur that we have misplaced or damaged our Social Security card and for that reason, would be happy to receive a new one. After all, you may need your Social Security card for a number of reasons these days. Some examples may include applying for a new job or applying for a credit card or loan from the bank. It is generally not a good idea to carry your Social Security card on your person at all times. If your wallet or purse is stolen or misplaced, the thief or finder now has your card and can wreak havoc. If you are the type of person that does carry their card at all times, that card may be in poor shape by now, so the idea of receiving a new one is most welcome. The deal is even sweeter if you do not have to do anything in order to get a new card. Watch out though! You may be a target of an identity theft scam!

How It Works:

A recent article indicates that residents in Prescott, Arizona have recently been receiving phone calls from someone stating the Social Security Administration office is issuing new cards. The purpose of the call is to verify your name and the last few digits of your number and alert you that a new card will soon be on the way. The caller may even tell you your full name and the first few digits of your Social Security number. The caller, of course, is not from the Social Security Administration office. They are, in fact, an identity thief.

Thanks to the vast amount of information available on the Internet, it is not hard for an identity thief to figure out the first few digits of any Social Security number issued in any state. A clever identity thief has to merely find this information and your name. Chances are that the thief is guessing that you were issued a Social Security number in the state in which you currently reside. That will not be true for everyone, but a large majority of people may fit that description and this is what the thief is counting on.

Your Defense:

This type of scam seems to be localized for now, but it will not take long to spread to other cities and states. Never fall for this type of scam. Never give your personally identifiable information (PII), such as your Social Security number, to anybody over the phone, especially if you did not initiate the phone call. The Social Security Administration office would not need you to verify your Social Security number because they already have it. If you receive a phone call of this nature, hang up and report the incident to your local police department.

If you do happen to need a new Social Security card, the safest way to obtain it is to visit your nearest Social Security Administration office and request it in person. Be prepared though, you will need to show proof of your identity. A birth certificate or valid driver's license may be required. Call ahead of time to verify exactly what you will need to bring.

If you believe your identity has been stolen, call 866.SMART68 today.