You may not even know your tax identity has been stolen until
you file your return. Only then do you find out that someone has
already claimed a refund—in your name. This type of fraud is
a serious problem and is getting worse. Here is what you need to
know.
A Growing Problem
Almost 2.9 million incidents of tax-related identity theft
occurred in 2013, up from nearly 1.8 million the previous year,
according to the U.S. Treasury Inspector General for Tax
Administration. The IRS has reported that, from 2011 through
October 2014, it stopped 19 million suspicious returns and
protected more than $63 billion in fraudulent refunds.
While that is just a tiny fraction
of the total number of individual returns filed and billions
refunded, the impact of tax identity theft can be significant. Such
theft typically takes the form in one of two ways:
