Taxpayers have another reason to be frustrated with the Internal Revenue Service: Late refunds due to widespread identity theft.
The delayed refunds are a result of the IRS’s work to fight identity-theft-related tax fraud, according to the The Wall Street Journal. Though that means the agency’s efforts are paying off, the downside is a delay for many people of low- to moderate-income who anticipate the funds to pay bills.
The IRS has received five times the number of identity theft claims in February 2012 than it did in February 2011, according to a representative from the agency’s Criminal Investigation Division who spoke at the International Association of Financial Crimes Investigators conference on Thursday.
The rise in claims is a result of organized crime rings now targeting the IRS, the representative said at the conference. Many perpetrators are based worldwide and use mules in the U.S. or file claims electronically.
Identity thieves often use other people’s Social Security numbers to file fraudulent tax returns online and reroute the refund to a location they can access. By the time victims file their own returns, the crooks have already received the victim’s refund.
The IRS said it has improved the electronic screening system to identify these refund claims from crooks, The Journal reported. When fraud is suspected, a refund can be held up for weeks or months. Typically it takes at least six months for a legitimate filer with an identity theft claim to get his money.
Shelly Waldman’s refund has been delayed due to an identity theft claim. Read more about her story and how Identity Theft 911 is helping her here.
“We were anticipating a big refund,” Waldman said. “We count on that money.”
If you suspect your identity has been stolen, call your insurer or bank, which might provide LifeStages™ Identity Management Services from Identity Theft 911. Or contact us directly. One of our fraud specialists will guide you and provide practical support until your good name and credit are restored.
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