Tax efile

E-filing your tax return is a quick and easy method preferred by the IRS—and scammers, too.

With a computer and your personal information—name, address, birth date and Social Security number—criminals can e-file a fraudulent tax return to claim your refund. Already netting scammers billions in bogus refunds, it’s a crime that’s high

By electronically filing tax returns that indicate an entitled refund, identity thieves need no W-2s or other tax forms, just the personal identifiers of legitimate taxpayers. Refunds for e-file returns are typically issued within 21 days of IRS receipt, although it can take several months for the IRS to actually receive and “document-match” tax-related paperwork such as employer-provided W-2s and 1099s with claims made on a tax return.

So by the time the tax identity theft is discovered, it’s too late. The bad guys have secured the taxpayer’s refund either by having the money deposited directly into a bank account, sent as a Treasury check (often mailed to a vacant home and cashed at unscrupulous businesses), or preloaded to a debit card so the funds can be withdrawn from ATMs.

As crooks get thousands of dollars per fake return, taxpayers are left with a time-consuming and hassle-filled ordeal to prove their own identity to get their entitled refund. Victims are not responsible for stolen money and eventually will get their entitled refund, but it can take time.

This type of tax-related identity theft is often done by organized crime rings and street gangs. In some areas, classes are held by identity thief instructors who, for a commission of stolen funds, teach students how to collect fake identifies to file bogus tax returns.

Victims include everyday taxpayers; children; elderly and disabled people, who aren’t required to file returns (and whose Social Security benefits may be jeopardized after scammers report fake self-employment income under their fake returns); or even the dead, whose info can be gleaned online from ancestry websites, published obituaries and the Social Security Death Master File.

How to protect yourself:

  • File early. Scammers do, hoping to beat you to the punch and claim your refund.
  • Know the tipoffs. Suspect possible refund fraud if you try to e-file your tax return and it won’t go through; if an expected refund doesn’t arrive within a month; or if you receive letters from the IRS saying that multiple returns were submitted in your identity. Assume it already has occurred if you received tax forms from an employer you have never worked for or other unexpected correspondence.
  • Avoid Wi-Fi when e-filing. Connect to the Internet with an Ethernet cable. A wireless computer is less safe and public Wi-Fi networks shouldn’t be used for tax work.
  • Check the status of your refund if you don’t receive your refund within a month of filing. If you suspect tax-related identity theft, call the IRS at 1-800-908-4490.
  • Don’t store returns and other tax information on your computer. Once you’ve filed, transfer the information to a flash drive or a CD.
  • Make sure your computer has updated antivirus protection and a two-way firewall. Be sure your wireless Internet is protected with a network key. Regularly run and update security software.
  • Never click on links or attachments in emails from strangers. This could infect your computer with malware that steals your personal information.
  • Never provide your SSN or other personal information to telemarketers, text messages or emails unless you initiate correspondence with a trusted entity.
  • Verify solicitations. If you receive a phone call, fax or letter from someone claiming to be with the IRS, verify it by calling 1-800-829-1040. Unsolicited emails purporting to be from the IRS are scams.

Brett Montgomery is a fraud operations manager at IDentity Theft 911.

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