What to do if you are Victimized by Identity Theft Tax Fraud

Identity theft involves the larceny and use of a person’s individual information such as name, Social Security number, date of birth and bank account number. An identity thief will use this information quite effortlessly to use credit accounts in one’s name, create new accounts in that name or use the information to avoid law enforcement after committing a crime. That, however, is not the end of it. They may choose to sell the information to the highest bidder online, which may result in it being by various perpetrators.

The worst of it is that an individual does not know he has been victimized until a credit company or the law telephones him/her about overdue payments. In a 2006 survey conducted by the Federal Trade Commission, it was revealed that about 8.3 million American consumers (3.7% of the adult population) had become victims of identity theft in 2005. The result was that the great losses were suffered by credit companies and banks and the victims spent over 200 million hours trying to recover from their ordeal.

There has been a recent rise in the use of identity theft to collect due tax refunds.  As a matter of fact in 2012 it rocketed by more than 80%. The IRS was able to resolve 500,000 identity-theft cases the previous year, but still had about 300,000 cases pending in February. Furthermore, 35,000 additional employees have been trained to help victims in several ways including learning to recognize hints of identity-theft .

According to experts, it is not a complicated process to commit this crime. In North Carolina, a man broke into a Jackson Hewitt Tax Service office and stole clients’ files to use for refund fraud.  At the Fresno, California IRS Service Center, a part-time data entry clerk allegedly stole the returns (did not enter the data from 68 papers 1040s) and used them to file for phony refunds.

In cases as they above, one cannot be protected even when following guidelines from the IRS or the FBI. What then should a victim do?

♦If suspecting that you are a victim of identity theft tax fraud, of course you should immediately contact the IRS. They will probably give you a special ID Pin number to use for positive identification. But do not stop there. Chances are your information could be used elsewhere.

♦Next contact the fraud departments of the three major credit bureaus to place fraud alerts on your credit file in order to reduce your risk of further victimization. You will need to monitor your credit report more closely, so you will need to request a current copy of your credit report to determine whether any further unknown fraud has occurred.

♦Remember to ask about the possible existence of secondary cards recently taken out in your name.

♦And of course do not forget your informing your bank and following their suggestions. Ask for the fraud/security department (bank/anywhere else necessary) and notify them both by telephone and in writing. In case that fraud has been committed the account should be closed; personally, it would be wise to do so in any case once ID theft has been verified.

♦Definitely contact the police department in your area (and the department of the area where the theft occurred should it be different) and file a police report. Do request a copy of the report if it is not given to you.

♦It is suggested that a list of who you spoke with and when, as well as their occupation, telephone number and other information you may deem important.

♦An identity theft complaint should be filed with the Federal Trade Commission.

♦At www.IC3.gov, you can report online identity thefts.

Taking precautions is always the best policy. A list of this is found in the FBI site on identity theft, but the general rule is be on the guard: store all your personal information in a safe place, examine your credit reports and bank accounts often and simply be aware. The sites embedded in this article are informative and helpful.  As a final note, one cannot help but contemplate how odd and disappointing it is that every step taken towards simplifying modern-day life seems to steer towards more complex and complicated problems.