(March 10, 2017) - IRS (Internal Service Revenue) has announced a major decline in identity theft due to shutdown related to fraudulent tax returns. IRS has entered a partnership with private tax sectors to prevent any scams as a result of identity theft.
The program, which is proven to be successful in targeting tax return frauds, has resulted in a 46 percent drop in identity theft. Working with private tax prepares let IRS gained the upper hand in fighting different forms of scams. According to reports, the victims of these scams included soldiers overseas, patients with mental disabilities and people in rehabilitation centers.
Identity theft in relation to tax refund has greatly cost the tax return system to the tune of $10.8 billion. It was proven difficult to track for the information need to file a tax return bears little details. Basically, fraudsters only have to get the Social Security number of an individual, as well as the date of birth and the name, to file for a tax return. After that, they could obtain prepaid debit cards. These types of cards do not require a bank account.
A man pleaded guilty on Tuesday for stealing $1.8 million. He did it by filing tax returns using stolen IDs in Pennsylvania, which is a part of a larger identity theft organization. It was likewise reported earlier this month that frauds were creating a setback in tax refund issuance. This case is a pressing issue for many private tax preparers. According to Brian Ashcraft, Liberty Tax’s directory of tax compliance, identity theft is the foremost issue that the IRS talks to them about.
One of the reasons why there was a significant decline in the victims of identity theft is the drive of online tax preparers to strengthen their password recovery process, using two-step verification processes. Meanwhile, IRS issued the deadline for employers to report the earnings of their employees from March 1, 2017 to January 31, 2018. It will give IRS enough time to detect any problems before an unsuspecting victim filed their income tax return.
In addition, the tax agency has delayed the issuance of refunds to the recipients of earned income tax credit, as well as the added child tax credits until February 15th. The people who are qualified have income too little to pay for federal taxes, but they receive larger checks most of the time. That said, they have become the higher prospects for thieves and scammers.
Although the improvement can be viewed as commendable, some people believe that it is only the first step to ultimately prevent the fraud problem.