Emerging Threats

Tax Season: Avoiding an April Nightmare



The tax filing season is coming to a close, but that's not slowing down these crafty crooks.

Identity theft is at an all time high and unfortunately for you, it could You go to file your returns only to get a letter back from the IRS stating that “you” have already filed, collected, and cashed your return.

Or at least some one posing as you….

So many people rely heavily on this springtime cash flow windfall, and it is devastating when everything you were hoping to buy or making that final loan payment just blows up in your face.

Even worse, it often takes months, sometimes years, to  unravel the scheme and get your life back in order.

Check out these two unfortunate stories below:

“I called the IRS and they told me, are you sure you haven't filed?” explained Alicia Rae of Renton as she recounted her filing nightmare last year.

Rae tried to file her 2011 return electronically on January 1st of last year, expecting a refund of $700. The local college student was counting on the money to buy a laptop for her classes. But an ID thief had already filed for a refund in her name and using her social security number. As a result, she had to mail a paper return- plus copies of personal records to prove her identity. She says despite multiple calls to find out what was going on, she could never get a full response.

“Their explanation of the whole thing was just well, ‘Wait. And you'll get it when you get it.'  So their whole attitude was just really frustrating,”  Rae said.

Ida Lim of Kent also had her electronic filing rejected when she filed last February. She also had to mail a paper return and send proof of who she was for an investigation.

“Everyone I talked to was very nice, but they couldn't give me any information,” Lim said.

Lim says it took 3 months just to confirm her nearly $4,000 refund was claimed by a thief- but she still had to wait.

“I called them on May first and I talked to a representative for the IRS and they told me I had to file an Identity theft Affidavit,” she said.

Tax ID theft is escalating to staggering proportions. According to recent IRS data in fiscal year 2011 (Oct. 1, 2010 – Sept. 30, 2011) : 276 investigations totaling $14 Billion in fraudulent returns.  Fiscal 2012: 898 cases with total fraud of $20 Billion. At the rate things are going, the number of returns filed by identity thieves in  2013 could double last year's numbers.

“We pursue them criminally,” said Kenneth Hines, Special Agent In Charge of the IRS Criminal Investigation Division. “Our main goal is to identify them. Stop them. Incarcerate them.”

Hines says the IRS is increasing enforcement efforts with arrests across the country, including our state. Last month, federal agents filed formal complaints against Barbara Holly Stahlman of Puyallup for allegedly filing fraudulent returns from her home, using other people's names and identifying information. Stahlman is accused of 10 counts of tax fraud totaling nearly $50,000.

“When we work these identity theft cases, we don't work them alone. We have our partners at the Secret Service,  U.S. Postal Inspectors.  These types of schemes touch a lot of areas. They touch the tax system, they touch the mail system, they touch debit cards or credit cards- prepaid debit cards, prepaid credit cards.”

Hines says there are a number of ways suspects obtain other people's identities and the victims are typically random. It could be a disreputable person offering tax preparation services, which is alleged to have happened in the Stahlman case.

“It's a random process on how some of these identities get into the hands of the thieves,” Hines explained.   “Companies' data bases being hacked or taken, or people having them and selling them.”

Investigators say some thieves pay friends or relatives who have access to personal information because of where they work.  Some crooks call or email random consumers  and claim to be with the IRS. The Internal Revenue Service never contacts people by email or phone asking for personal tax or financial information.

One of the first signs you may be a tax ID theft victim, is if you have trouble trying to file electronically.  If you're told that you already filed, or see that the amount of your refund other information is off-  you need to call the IRS right away. Expect to send documents regarding the suspected identity theft and documents proving your identity.  And be persistent. Both Ray and Lim say the most frustrating part of their experiences was lack of updated communication from the IRS, and difficulty getting an actual human on the phone.   They women also advise tax ID theft victims to plan for the investigation process to take long time- unless you're fortunate enough to catch the theft as soon as the illegal return was filed.

It took 7 months for Rae to get her refund. Lim had to wait 11 months.  Both refunds included interest for the time they had to wait.

“It was obvious I was the victim,” Lim said. “I shouldn't  have had to wait until this year to get my refund. I understand they're under staffed, I understand that this happens a lot, but once it's confirmed, I don't think they had a right to keep my money. And I really needed that money.”

Both women filed early this year and have refunds coming.  They're on pins and needles about what will happen this year.

“Whoever it is, still obviously has my social security number,” said Rae. “I'm kind of concerned just for the future- of problems it might cause.” said Rae.

Tax i-d theft victims are issued a special security protection PIN for their future fillings, to confirm they're the legit taxpayer.  According to the IRS,  250,000 security PINS were issued last year.  So far this filing season the number is up to 770,000. – View the original article here

These ladies were lucky that they were able to get their refunds, even if it took the better part of a year.

A friend of mine had her identity stolen 5 years ago and she is still fighting to get it back to this day.

She is a young stay at home mom with three children.

She isn't a stay at home mom by choice, her identity was stripped from her and the inability to prover herself has raised red flags and questions that have made it impossible for her to find a job.  Her husband works multiple jobs to support them while this gets cleared up.

But it has been an absolute nightmare for them.

They still receive  threatening phone calls from debt collectors for items they never bought and no explanation is accepted.

The scariest thing is not her own identity, but that of her children.

A child identity is now  51% more likely to be stolen than any adult.

She now has to contend with the constant fear that the person who has her identity will attempt a similar attack on her children.

She is working her hardest to get her life back in order but it is not an easy task.

If you want to make sure that you are doing everything you can to prevent this from happening to you or your family  please check this out.http://www.survivallife.com/taxable-nightmare

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  1. JJM

    April 8, 2013 at 9:43 AM

    More reasons why NOT to allow them to use YOUR dollars for 12 to 22 months at no cost to them. Claim additional exemptions but be sure to deposit the extra cash in a savings account intended only for Tax Money.

  2. TpC

    April 9, 2013 at 5:43 PM

    a crook would have to be a major dumbass to steal my identity. I never get a refund being self employed. I ALWAYS owe come tax time.

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