Tax Refund: How Thieves Are Stealing Your Identity

Tax Refund: How Thieves Are Stealing Your Identity

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Jenny is a victim of one of the most lucrative crimes in the United States with the unlikely and pleasant sounding acronym of SIRF, which stands for Stolen Identity Refund Fraud. Bottom line: using stolen Social Security numbers, the bad guys create a totally bogus tax return which qualifies for a refund, file it, get the money sent to them, and then they disappear. It has resulted in literally billions of dollars of bogus refunds being sent out each year.

It happened to Jenny not long after her purse, containing her personal identifying information and the Social Security numbers of her kids, was stolen. A goldmine for a scam artist. She talked to us about what happened next for our FOX 11 Investigates series airing Wednesday. "It's frustrating, because I had plans. Big plans. I was going to take my kids on a vacation that I can't really pay for at this point, because I don't have the money." 

What happens is that the bad guys file early, like in January, then when the unknowing victim files, perhaps in April like most of us, their return is red-flagged and kicked back because the Social Security number has already been used. So it takes months for the legitimate taxpayer who' been the victim of the theft to get things sorted out and the refund they deserve finally sent to them.

Meantime, investigators are on the trail of the bad guys, who know all the tricks to stay one step ahead of the law.  That is not to say that the IRS and a number of local, state, and federal law enforcement agencies aren't making progress. They are, but they're still a long way from stamping this out. There is a never ending supply of stolen IDs. And the challenge is that, in a lot of cases, the ID theft was the result of people who have legitimate access to your personal identifying information selling it to criminals. These are people like insurance agents, paralegals, medical providers, Social Service workers, and of course, dishonest tax preparers. All have been convicted in Southern California in recent months. So the conventional wisdom that most of us already know and practice about not giving your Social Security number out, about guarding your personal information, in most cases is irrelevant in SIRF because its those people who have a real reason to have your ID info are the ones who are selling you out. At least some of them are going to prison. And the IRS wants to help stop you from becoming a victim, if possible.

There is a wealth of information available online about this problem. Check that out as well as the 800 number on this website for more information and for reporting SIRF if unfortunately it's happened to you.

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