Wednesday, April 15, 2015

How Widespread is the Problem of Tax-Related Identity Theft?

While Googling the question in the title this morning, I found answers  ranging from "hundreds of thousands of returns per year" to "19 million returns over three years." If that latter number is correct, that's one of every 50 US citizens -- and not all US citizens file returns. Pretty big stuff.

I had noticed some stories about it out the corner of my eye, but hadn't thought much about it. Then the other day, my significant other got the following message when she tried to file her return as usual through the online tax preparation she uses:

We could not e-file your return for the following reason ... Duplicate Social Security Number: A tax return with the same Social Security number has already been submitted -- in other words, it appears you're trying to e-file the same return twice. If you need to change this return, you'll need to file an amended return on paper, by mail.

So it looks like some identity thief filed a fake return in her name. Not sure how that wouldn't have been flagged from the beginning. She has the PIN thing, and presumably any fake return would have featured a new address, new bank routing numbers for refund deposit, etc. that would have aroused suspicion.

So anyway, she had to file the old-style paper return instead, and now she'll have to wait awhile (some news stories indicate up to nine months!) for her refund. The latter is no huge deal (it's a small refund and after having to send them additional money last year she was just relieved to not have to do so this year). But filling out the paper returns is a big huge hassle, as anyone who's ever had to do it that way no doubt remembers.

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