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How Identity Thieves Can Steal Your Tax Refund

Last April more than 400 Palm Beach Florida employees (mostly police officers and firefighters) had a very unpleasant surprise at tax time.  When each attempted to file they were informed that the IRS had already processed their tax returns.  All that an identity thief needs is your name, date of birth, and Social Security number, and a tax return can be filed and your refund stolen.  The problem has become so prevalent that the IRS has set up a special phone number for victims to call.


The scary part about this is that once your personal information has been comprised it is many times sold over and over again to other criminals.  It can take months to get things straightened out with the IRS. In the Palm Beach case it was believed that the identity thieves got the information they needed through the payroll and/or pension department of the city.  In other cases, people are tricked into giving out their Social Security numbers through phishing e mails and promises of qualifying for government grants or stimulus money.


How big of a problem is this?  The IRS says that last year they caught 260,000 fraudulent returns and stopped $1.4 billion in bogus refunds from being processed. Other than closely guarding your Social Security number, there appears to be little that can be done to stop this from happening once your information has been compromised. The only way that most people learn that they are a victim is after they attempt to file their tax return and discover that their return has already been processed.

Most people only think of identity theft as a matter of guarding their credit reports; this really adds a whole new dimension to the problem and there seems to be no solution in sight.

If you have been a victim of identity theft, please use the comments section below to share your story.

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James L. Paris
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