coordinated crackdown on tax-related, ID theft has
drastically reduced the numbers of new refund fraud
victims. But new schemes keep popping up all across the
thieves are growing in sophistication,” warned
Internal Revenue Service Commissioner Charles Rettig on
a call with the news media last week.
touted a 19-percent decline in the number of reported
identity theft victims for this year through October,
compared with the same period in 2017. The decline is
even more dramatic — down more than 70 percent —
compared with 2015.
reported that about 177,000 taxpayers were victims of
tax-related ID theft so far this year through October
2018. That compares with about 242,000 victims in 2017
and about 699,000 victims in 2015.
times, people discover they’re a victim when they have
trouble with e-filing their own tax returns. Headaches
only build, as they try to unravel the mess and claim
their legitimate tax refund.
has been working with state tax agencies and tax
professionals, including tax powerhouses H&R Block
and Intuit, to safeguard taxpayer data since 2015
through a partnership called a “Security Summit.”
thieves aren’t giving up, though, so the IRS and
others are warning about some aggressive scams.
secret sauce of the Security Summit has included getting
the word out in real time to notify key players in the
tax ecosystem about new scam twists.
Riley, state revenue commissioner for Georgia, said her
state ran up against a scam where a business account was
created with the state department of revenue.
manipulated the numbers to make it appear as if the
business had somehow been overpaying or over-withholding
required taxes with the state and then the con artist
requested fraudulent refunds.
sharing that information in real time, she said, others
could crack down on any similar types of schemes.
Atlanta TV stations reported more details on the
elaborate scheme, which involved an 18-year-old who
allegedly set up an online business out of his
parents’ home. The teen was arrested last week and
accused of attempting to scam the state out of more than
$20 million. The state’s system spotted the fraud and
the state did not pay any money.
the teen amassed billing and banking information by
selling goods on Amazon. It is alleged that he set up
withholding accounts and sales tax accounts, overpaid
those accounts by more than $25 million and then
the holiday season, consumers are once again reminded of
how important it is to watch out for fake websites,
phishing emails and other schemes.
are reminded that they can be targets of ID thieves,
too, because companies hold sensitive tax data on
employees, such as Form W-2 data, which is highly valued
threats are constantly evolving,” said John Ams,
executive vice president for the National Society of
email schemes try to steal money or key information that
can be used to file fraudulent tax returns. In 2018, for
example, the IRS recorded a 60-percent surge in phishing
subject lines in emails that say things like: “IRS
Important Notice” or appear to be from a government
agency that is threatening to seize your tax refund.
can forward email schemes to firstname.lastname@example.org.
big trend for scammers in 2018 focused on targeting tax
professionals in order to steal the data of tens of
thousands of tax filers.
the 2018 tax filing season, the IRS received five to
seven reports a week from tax firms that had experienced
some level of data theft. So far for the year, the IRS
received 234 such reports through Nov. 5. That’s up 29
percent from last year.
crooks want good, reliable information in order to
create a fraudulent tax return that looks good enough to
bypass IRS filters.
the National Society of Accountants, said the IRS is
hindered because it has no authority to require tax
professionals to report breaches. By reporting breaches
quickly, though, more ID theft could be stopped, Ams
professionals are warned to look out for signs of fraud
that include: Hearing from clients who haven’t yet
filed tax returns but receive refunds or letters from
the IRS; filing an electronic return but then getting
rejected by the system because a return with the same
Social Security number was already filed; and suddenly
seeing that the number of returns filed using the tax
practitioner’s electronic filing identification number
far exceeding the tax professional’s actual number of