Identity Theft and your Taxes

Incidents of identity theft have increased annually for several years. They spike during tax filing season, when scammers use bots to robo-file fraudulent returns to get fake refunds and other methods. This year, the IRS has partnered with state revenue departments and tax software providers to add some security features.

What does that mean to you?

It means taking precautions and providing some additional information to verify your taxpayer identity. For example, some states tax agencies require information from a state-issued ID, such as a driver’s license. That information is matched against the state’s records to prove that you are you before issuing a refund. Other precautions are “behind the scenes” and not visible to taxpayers (or tax preparers).

More changes are down the road.

The IRS is piloting an Identify Protection Personal Identification Number (IP PIN). For those in the pilot program, the IP PIN is required to file a return. Taxpayers who were tax fraud victims in prior years have also been issued an IP PIN that should be used to file 2015 returns.

The IRS’ Criminal Investigation unit tracks down and prosecutes tax scammers – over 2,000 cases in the last three years. But the scammers are not deterred, based on the volume of taxpayer reports. By focusing on prevention, the IRS hopes to reduce opportunities for your identity to be stolen.

During this tax filing season, and throughout the year, diligently guard your personal financial information.

Falling for a fraud or scam can cost you incredible amounts of time and money, and create a lot of aggravation.

Want to know more about how the IRS is protecting taxpayers against frauds and scammers?

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