Tax Return Basics: What You must know!

Tax ID Theft

1SThree things in life are guaranteed: death, taxes and tax-related identity theft. Michael Kasper would agree. Someone registered Kasper’s IRS.gov account, requested the document for his 2013 tax return, then filed a 2014 tax return.

The crook used a middleman—an innocent woman who answered his Craigslist ad for a moneymaking opportunity. He sent the money to her bank account, then she wired it to Nigeria, not knowing she was helping the crook.

Kasper’s account got busted into when the crook guessed some information about him, maybe stuff he got off of social media. Go to IRS.gov to secure your account to make it nearly unhackable.

Get Your Tax Transcripts

You can request information via online about your tax returns and transactions for a given year. If you’re not registered yet, you’ll need your Social Security number and instant access to your e-mail account. The step after that is to answer private questions to confirm your identity. Otherwise just log in with your password and user ID.

To receive the information by snail mail, you’ll need your SSN or individual tax ID number, address from your latest tax return, plus birthdate.

Suspiciously Filed Returns

The IRS has been contacting people who are associated with suspiciously filed returns, requesting that they confirm their identity. This is the result of criminals using TurboTax to process returns. The IRS will always make such a request with snail mail, never a phone call, text or e-mail.

If you get in the mail a Letter 5071C from the IRS, there’s only two ways to confirm you are you: 1) Visit idverifty.irs.gov and answer some questions, or call the 800 number on the letter itself.

For this verification process, you should have on hand your previous year tax return, the current one, and any supporting paperwork like Forms 1099 and W-2. You’ll then need to verify you filed the suspect return.

And remember, if you’re on this list and the IRS wants to contact you, it will be by snail mail. Anything else is a scam.

Robert Siciliano is an identity theft expert to BestIDTheftCompanys.com discussing identity theft prevention.

Don’t be scammed into paying Back Taxes

It’s easy to scam someone who did something wrong by telling them they need to fix their mistake. This is why thousands of people get scammed into paying back taxes to the IRS—the IRS has nothing to do with these scams, of course, but the predators prey on peoples’ fear of Uncle Sam. It all begins with the fraudster making a phone call, pretending to be an IRS employee.

9DThey have other tricks up their sleeve too, such as making the caller ID show a number that appears to be coming from the IRS and identifying themselves with phony IRS badge numbers. They’ll even leave urgent messages if they get voicemail.

Preying on emotions, the crook gets vulnerable people to give up private information right then and there—enough information for the crook to commit some kind of identity theft crime. When many people hear “IRS,” they get scared. Scammers have ripped off millions of dollars as a result.

The IRS won’t give you a phone call if you’re delinquent in your tax payment. They’ll snail mail you an official notice instead. In fact, the IRS, despite its negative stereotype, won’t use scare tactics or threatening verbiage. Anyone on the phone who does this is pond scum; hang up immediately.

The IRS also won’t ever just up and e-mail you about back taxes. If you see “IRS” in a subject line, do not open it. Instead, forward it to phishing@irs.gov and delete it.

If you want to have a little fun with these thieves, then if you ever get a call from someone claiming to be from the IRS, nonchalantly tell them that you yourself work for the IRS. See what happens.

A woman in Denver, Rachel Fitzsimmons, received calls from the “IRS” telling her they were filing a lawsuit against her. The message was a robotic-sounding female voice that left a call-back number. At first she was unnerved, but then after doing some research, recognized this as a scam. She called back the number, let the man talk a little with the threat, then told him she worked for the IRS (she doesn’t). He immediately hung up. Busted!

Robert Siciliano personal and home security specialist to BestHomeSecurityCompanys.com discussing burglar proofing your home on Fox Boston. Disclosures.

Tax Refund Thieves can be thwarted

If your tax refund doesn’t come, don’t be quick to blame the government. Tax refund fraud is very common. The IRS pays billions in fake refunds.

9DOne well-organized tax refund crime ring that spanned several years, and that involved stolen Social Security numbers and birthdates, scored well into the millions of dollars, costing the Treasury Department millions. The fake tax returns were filed, but luckily, some were intercepted by the government. But how did this happen at all?

The ring leader tracked snail mail routes and purchased address lists covered by single mail carriers. They’d then snatch refund checks. A clue was that most of the stolen identities originated from Puerto Rico. Though Puerto Ricans have SS numbers, the IRS doesn’t tax them unless they’re paid by the U.S. government or U.S.-based companies. These SS numbers are especially prized to crooks.

But the problem goes well-beyond Puerto Rico. A recent report says the IRS paid $132 billion in bogus tax refunds over the past 10 years. In fact, the IRS is in violation of the Executive Order 13520, which President Obama had signed to reduce improper refunds, says the Treasury Inspector General for Tax Administration.

What can you do?

  • If you don’t pay any income tax, you can still claim a refund, due to the Earned Income Tax Credit. In 2012, 21-25 percent of all claims were improper, says the recent report. This translates to $12-$13 billion being misspent. Even audits can be erroneous, meaning your tax refund may never have been approved.
  • Make sure your tax refund is definitely yours.
  • Get a locking mailbox. Locked mail cant be easily stolen.
  • File early. If you file before a crook does you’ll get your refund.

What the IRS should do:

  • One way to determine if an online filing is legitimate is to check the reputation of the device issuing the tax return. If the PC, Mac, tablet or smartphone has a history of online criminal behavior or is exhibiting real-time suspicious behavior, the transaction could be flagged for review before the return is accepted or processed.
  • When using an advanced device reputation as the first check in the fraud detection process, the IRS would be able to stop many more fraudulent tax returns as well as downstream fraudulent activities.

Robert Siciliano, personal security and identity theft expert contributor to iovation. He is the author of 99 Things You Wish You Knew Before Your Mobile was Hacked! See him knock’em dead in this identity theft prevention video. Disclosures. For Roberts FREE ebook text- SECURE Your@emailaddress -to 411247