Tax-Related Identity Theft

Anthem Tax Fraud Lawsuit

On February 4, 2015, Anthem announced cyber-thieves accessed the personal records of 80 million consumers in its database. Company officials initially stated the hackers were able to access customer names, social security numbers, birthdates, addresses, email addresses, employee information, and income information on January 27, 2015– more than a week before it made a public announcement. Media reports say this information was compromised as early as December 10, 2014.

This massive data breach has put sensitive information in the hands of criminals. Recent stories have surfaced regarding the filing of fraudulent tax returns. Identity thieves armed with a person’s information can file a fake tax return on her behalf and collect the refund check long before the IRS is able to catch it. Only one tax return can be filed each year so if a fraudster files a return first, you will be locked out from filing an authentic return. This recent article by Time.com explains how identity thieves have stolen more than $5 billion from the IRS.

Intuit, the company that owns TurboTax, shut down e-filing capabilities for state tax returns on February 5, 2015, amid concerns of fraudulent filings. Some state departments of revenue also declined to accept TurboTax e-filings based on concerns of ‘suspicious filings’. Intuit announced on February 7, 2015, that it would resume e-filing activities after determining the fake filings “did not result from a security breach of its systems”. Forbes.com also reported on the increase of fraudulent state tax return filings.

What to do if you are a victim of tax fraud

The Internal Revenue Service shares these steps for people who believe they are a victim of tax-related identity theft.

• File a report with the local police.
• File a complaint with the Federal Trade Commission at www.identitytheft.gov or the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.
• Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
  • Equifax, www.Equifax.com, 1-800-525-6285
  • Experian, www.Experian.com, 1-888-397-3742
  • TransUnion, www.TransUnion.com, 1-800-680-7289
• Close any accounts opened without your permission or tampered with.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, take these additional steps:

• Respond immediately to any IRS notice; call the number provided
• Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.
• Continue to pay your taxes and file your tax return, even if you must do so by paper.