Are you looking forward to getting a tax refund? Tax identity thieves may be looking forward to getting your refund too.
Tax identity theft happens when someone uses your Social Security number (SSN) to get a tax refund or a job. You might find out it’s happened when you e-file your tax return and discover that a return already has been filed using your SSN. Or, the IRS may send you a letter saying more than one return was filed in your name, or that IRS records show you have wages from an employer you don’t know.
DATCP works with the Wisconsin Departments of Justice and Revenue to detect tax preparation fraud. Anyone suspecting fraudulent activity is encouraged to file a complaint with DATCP so that we can take quick action.
More than $51.3 million in fraudulent and erroneous refunds and credits were blocked last tax season thanks in part to the Wisconsin Department of Revenue’s use of analytics-based identity verification tools that can also protect against identity theft. During the past ten years, the department stopped more than $416 million in potential fraud.
Take protective measures when you file your taxes:
- File early in the season to get a jump on a thief who may have your information.
- If filing your return online, make sure your operating system and antivirus software are up to date, and set up strong passwords for your tax software login.
- If you are working with a tax preparation service and witness any questionable practices, report the suspicious behavior to DATCP.
- Questionable practices might include tax returns being filed on your behalf without your consent, not receiving copies of documents that you signed, or not receiving copies of documents that identify the terms of a transaction.
Newer tax scams
Scenario 1: ID thieves file a fake tax return and have the refund deposited into your bank account. The thieves then contact you, often by phone, and — posing as the IRS or debt collectors for the IRS — demand you return the money to the IRS. But following the thieves’ instructions actually sends the money to them.
Scenario 2 (variation on Scenario 1): After you get that erroneous refund in Scenario 1, you get an automated call, allegedly from the IRS, threatening you with criminal fraud charges, an arrest warrant, and “blacklisting” of your Social Security number. The caller gives you a case number and a telephone number to call to return the refund. Don’t call! The IRS has specific guidance for returning funds to the agency, and the steps differ between returning paper checks and direct deposits.
Scenario 3: In a different scam, criminals are using imposter tax preparation sites and phone numbers to steal peoples’ personal information. Here’s how this scam works: You go online to find a tax preparation service to prepare and e-file your tax return. But instead of landing on a legitimate site, you accidentally visit a look-alike site created by scammers. The site looks real and it’s set up to collect personal information.
