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Tax Refund Fraud Disaster
March 02, 2015

The tax refund fraud is a serious problem and it seems to be getting worse with attacks being staged by criminals from all corners.

First, in order to understand the magnitude of the problem, we have to look at some numbers. Although the IRS was able to detect $24.2 billion of tax refund fraud in 2013, the IRS also lost an estimated $5.8 billion in tax refunds claimed by identity thieves who filed taxes before the legitimate taxpayers did.

Second, the tax software company, Intuit, temporarily suspended all State electronic filings recently following the detection of high number of fraudulent filings which goes to show the scope and creativity of criminal activities to exploit every possible weakness in the system.

Third, data breach cases which result in the loss of key identity components such as Americans’ Social Security numbers, can be used by criminals to file taxes before legitimate taxpayers do to claim their tax refunds.

The tax refund fraud appears to be a rising risk and a very costly problem for the government. The problem also results in delayed refunds for taxpayers who must wait for a completed investigation after they detect and report the fraud.

A few actions that taxpayers can take to address this problem are file taxes as soon as all the paperwork and information necessary for tax returns are ready, keep an eye for the refund if you expect one, and report any unreasonable refund delays as soon as possible.

Below, you will find links to some tax refund fraud related articles for additional background and solutions.

Tax Refund Scam

Tax Filer Identity Theft Risks

Where is My Tax Refund?

Until next time, be identity safe,

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