The Good, The Bad and the Plain Ugly News for Victimized Taxpayers

victimized taxpayers
Photo Credit:Flickr/www.efile.com

From the IRS’s perspective, it sure sounds like the massive government agency is doing a pretty decent job of protecting taxpayer information from cyber-criminals.

Even though the tax scam artists continue to reach out to taxpayers via phone and emails attempting to get their financial information or steal money from them, those crooks hacking into the IRS data banks might be having a slightly more challenging time.

In fact, according to a recent Forbes.com article, “From January through April 2016, the IRS stopped $1.1 billion in fraudulent refunds claimed by identity thieves on more than 171,000 tax returns, a nearly 50% boost from last year’s dollars.”

The IRS has more good news too. They suspended a total of 36,000 suspicious returns. Those suspicious returns would have claimed a whopping $148 million in refunds had they gone through.

The Bearer of Bad News

Despite the good news, the bad news sounds worse. The IRS has decided to shut down and eliminate the E-file PIN program they put in place late last year for those taxpayers whose identities have already been stolen and used to file fake tax returns. Why, you ask? It didn’t take long for the cybercriminals to make use of the program for their own nefarious business.

In February of this year, the IRS disclosed that hackers used stolen taxpayer information like names, Social Security numbers, dates of birth and full addresses in order to obtain E-file PINs through its website. According to a recent article, “Attackers attempted to get E-file PINs corresponding to 464,000 unique SSNs using an automated bot, but the bot was blocked after it succeeded in getting 101,000 of the PINs.”

If you happen to be one of the unfortunate victims who received an E-file PIN from the IRS you simply cannot use it anymore.

It’s hard to know what the future holds for you and all the hundreds of thousands of other taxpayers whose identifications have been compromised. It’s little comfort knowing that the only way to obtain a copy of your tax return is through the separate Get Transcript application on the IRS Website. Spoiler alert! The Get Transcript application database was breached in the past with hackers walking away with over 300,000 taxpayer dates of birth, Social Security numbers, and addresses.

Nonetheless, as expected the IRS spins the news to make taxpayers believe they have a handle on the situation. These statistics reported in Forbes.com don’t give victimized taxpayers much to hold on to. “The number of anticipated taxpayer victims fell between 2015 and 2016. In fact, since January of 2016, the IRS Identity Theft Victim Assistance function received 48% fewer correspondences, including federal form 14039, Identity Theft Affidavit, (downloads as a PDF) filed by identity theft victims.” And, “The number of tax refunds that banks and financial institutions returned to the IRS because they appear suspicious dropped by 66%. This, the IRS says, is another indication that improved data led to better filters further reducing the number of bad refunds being issued.”

To avoid all the ugly messes that are happening at the IRS and in the world of taxes, make sure you have your taxes handled by a reputable firm. Your chances of being scammed by phone or email are nil when you have us do your taxes. Give us a call to find out how we can help you get out of or stay out of tax troubles.