TAX-RELATED IDENTITY THEFT

Imagine, after filing your tax return, you receive a notice from the Internal Revenue Service that another return has been filed using your name and social security number – and someone else has your refund. Sound impossible? It happens. You likely know someone who has experienced tax return identity theft.

The good news? A lot’s being done about it. According to the IRS, since 2015, the number of tax-related identity theft victims has fallen by almost two-thirds and billions of dollars of taxpayer refunds have been protected.

How? The IRS launched a Security Summit in 2015. The Security Summit is a cooperative effort among software producers, tax preparers, banks, governmental departments, and more. These partners put in place numerous behind-the-scenes safeguards that are helping protect the nation’s taxpayers.

Recent key indicators of success include:

• In 2017, the IRS received 242k reports from taxpayers who claim that they are victims of identity theft compared to 401k reports in 2016, a 40 percent decline.

• At January 2017, the IRS inventory of identity theft reports was 34k, which is only ten percent of their 2013-inventory of 372k cases.

• The number of tax returns with confirmed identity theft declined to 597k in 2017, compared to 883k in 2016, a 32 percent decline.

• In 2017, banks recovered 144k refunds compared to 124k in 2016, a 16 percent increase. The amount of refunds recovered was $204 million in 2017. In 2015, the financial industry recovered 249k refunds totaling $852 million.

• Overall, the number of tax-related identity theft victims has fallen nearly 65 percent between 2015 and 2017.

Here’s what you can do. Protect your personal data. Don’t carry social security cards. Securely tax records and source documents. Shop reputable online retailers. Treat personal information like cash; don’t leave it laying around.

With over 20 years of experience in public accounting, Amanda Bechen CPA owns Bechen & Company PC located in Wagner, SD, and can be contacted at 605-384-4200 or www.bechenco.com.