In a CNN Money report, Inmates in U.S. prisons are using a tax scam to rob millions from the IRS. It’s not only inmates in prison; it’s the “regular” criminals that are helping themselves to other people’s money.
Imagine you filed your tax return and are eagerly waiting for your return. You do this every year; it’s kind of like using the IRS as a savings account. Now, with your return, you can pay off those bills that you ran up all year, especially during the holiday season. This is money you desperately need.
But then one day you receive in the mail a letter from the IRS saying that your return has been rejected. It seems that you have already filed your taxes and received your refund. …You have just become the victim of Identity Theft!
Now all of those commercials you have seen on TV and stories you heard on the news has become very real. This is happening more and more and is becoming very frustrating for the IRS and taxpayers alike.
What these scumbags typically do is steal someone’s personal information, including their Social Security number, and file a bogus tax return. This scam is usually perpetrated early in the tax season before people have a chance to file their return.
The IRS is stepping up attempts to protect taxpayers, “We take this issue very seriously and continue to expand on our robust screening process in order to stop fraudulent returns and protect innocent taxpayers.” per the IRS.
I can’t imagine what I would do if that happened to me and I was desperately in need of the money. Some people count on their tax return so much that they have included it into their strange type of budget. Not really a budget but it is a conscious plan, and it goes something like this: Spend, spend, charge, charge, spend, charge, spend and just stay above water until tax season. Then, payoff (or pay down) everything and start all over again.
If you are one of these people you know this is no way to handle your money. What happens if you don’t get that tax return? Or you get it many months later after all of the investigations have been completed? Be financially responsible, have and use a budget and strive to become debt free. Wouldn’t it be great to get a tax return that wasn’t already spent? Hey, it could go toward getting you debt free.
If your identity is stolen, you aren’t going to need to worry what to do with your refund check, “Joe Criminal” is spending it for you. It’s important to do what you can, and be diligent in protecting your identity. In some cases, there is just nothing that could have been, but in most cases doing just one small task could save you and protect your identity. Here are a few things you can do to protect yourself:
- Don’t carry your Social Security card or any document(s) with your SSN on it.
- Don’t give a business your SSN just because they ask. Give it only when required.
- Protect your financial information.
- Check your credit report every 12 months.
- Secure personal information in your home.
- Protect your personal computers by using firewalls, anti-spam/virus software, update security patches, and change passwords for Internet accounts.
- Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.
The IRS had nearly 650,000 active cases of tax return fraud at the end of last year. Do what you can to protect yourself. Remember, it can take the IRS six months or more to resolve a case and get you your return.