Consumer Protection | Business Protection

Beating Tax Refund Fraud Happens Early

June 19th, 2015

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One of the fastest growing forms of identity theft-related crime is tax refund fraud, which occurs when a thief files a false tax return using your personally identifiable information. This crime, which some experts estimate costs the IRS over $4 billion a year in faulty refunds, often goes undiscovered until the victim attempts to file his or her legitimate tax return and has it flagged as a duplicate.

Unfortunately, once someone has discovered that they are a victim of tax identity theft, they will struggle with the issue for many years to come. So just how does someone who has been victimized prepare for tax time? While the old “ounce of prevention” saying applies in so many different situations, this is truly one of those events that offer the victim almost no recourse other than keeping a thief from filing in the first place.

The most important thing you can do is to file your tax return early, literally in order to beat a thief to it. If anyone is going to find out that a return has already been filed in your name, you really want it to be the thief, not you. If you prepare your documentation in December, you’ll be ready to file after January 1st, the moment all of the paperwork is in order. There’s no reason to wait until April 15th, especially not when your tax refund is at stake. You will want to make sure that your employer is aware of your situation so that they can get your tax documents to you as soon as possible to enable early filing.

One of the tools that tax identity theft victims often overlook is using the resources of the IRS itself. While many victims are understandably disgruntled with the tax giant, you can be assured that the IRS dislikes identity theft as much as you do. Fighting identity theft has been an ongoing battle, and they are working to provide help to victims. Tax identity theft victims should contact the IRS Identity Protection Specialized Unit (IPSU) at 1-800-908-4490 as soon as they are aware of any problems or if they have questions or issues related to their filing. If you have contacted the IPSU and have not had a resolution to your case, you should contact the Taxpayer Advocate Service toll-free at 877-777-4778.

An important step to minimize the time spent on your identity theft case is being well organized. You should have filed a police report when you first found out you were a victim of identity theft. Keep a copy of this police report in a central, protected location. Along with this document, you should have a copy of any communication you have had with the IRS, including your IRS Fraud Affidavit. Just as you keep records of past tax returns, receipts and other documentation you need to file, hold on and protect these items.

Victims of tax identity theft must also remember that if your return was filed by a thief, that thief has your information and could easily have used it for other purposes. As soon as you learn of the false return, you should take steps to ascertain whether other aspects of your identity have been compromised. These steps include ordering a copy of their credit reports, closely reviewing financial statements, and even health insurance benefit statements.

If you are currently in the process of resolving tax-related identity theft, keep these resources in mind. As you look to the next tax season, try to start planning early to be sure you are able to file as early as possible. December is only six months away, so the time to prepare will be here before you know it.


Lesser-Known Ways to Steal an Identity

June 17th, 2015

Jackie here. We talk a lot about checking your credit report and bank statements for signs of ID theft, but making fraudulent charges on your accounts isn’t the only way thieves can use your identity. Thieves also love using not-so-well-known methods for theft as they can often avoid detection for much longer. Which of these types of identity fraud were you aware of?

Health Insurance

Medical care can be expensive, making health insurance a gold mine for thieves. Thieves can steal your insurance information and pretend to be you at the doctor or pharmacy. This isn’t just a financial nightmare; it can also lead to serious medical problems including cancelled insurance and conflicting medical records (which can lead to treatment difficulties).

Medical ID theft is surprisingly common. It is estimated that at least 2.3 million American adults have fallen victim to medical ID theft and the number continues to grow. Resolution is difficult too. Only 10% of respondents in a Ponemon survey had satisfactorily resolved their problem.

Criminal Record

Some thieves commit criminal ID theft by giving another person’s name, driver’s license number, or SSN during a criminal investigation. This can lead to arrest warrants in your name for crimes you didn’t commit. Although this type of ID theft is concerning, it is luckily rather uncommon. Here are some tips if you do find yourself in trouble.

Social Media Accounts

Your social media accounts are vulnerable to hacking. Thieves can gain control of your accounts and use them to solicit money from friends and to spread malware and other harmful links. Hacking your actual accounts isn’t the only way thieves take advantage of your identity on social media; some thieves create secondary accounts using your name and your pictures to trick friends into “friending” you so the scammers can attempt to take advantage of them.

Tax Refund

Tax ID theft topped the list of FTC consumer complaints in 2014, with the problem only expected to continue growing. Tax ID theft occurs when thieves file taxes in your name and take your refund. One of the best ways to fight this problem is to be sure you file early.

Your Computer

Are identity thieves lurking in your computer? Thieves use malware, ransomware, and other types of malicious software to take over your computer. Thieves can track your typing to obtain your login credentials, lock up your computer until you pay a fee, and redirect you to their websites when you browse the web. Antivirus software is essential, as is keeping up on your updates. Here are some more tips for keeping your computer ID theft free.

Other Methods

While the methods listed above are some of the larger problems when it comes to lesser known types of ID theft, they aren’t the only things to watch out for. Thieves may also take advantage of your frequent flier miles, hotel points, gift cards, chat programs, etc. If it’s valuable, odds are thieves have found a way to take advantage.

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Is Your Tax Refund Safe?

February 5th, 2015

Jackie here. Tax season is upon us and for some people that means returns are around the corner. While you’re hard at work preparing your tax documents, thieves are busy too, filing returns and claiming refunds that aren’t theirs. How can you protect your refund this tax season? Here are some tips from Time to get you started.

File Quickly- If you haven’t yet started on your taxes, start as soon as you can. Filing quickly can protect your refund by ensuring that you file under your identity before thieves do. Waiting until the last minute to file can greatly increase your risk of tax identity theft.

Minimize Your Risk- How big is your refund? If you’re getting back thousands this year, you might want to change your withholding to reduce the size of your refund. This won’t protect you from tax ID theft, but will minimize the amount of money that you have at risk should you fall victim.

Protect Your Information- All thieves need to file a fraudulent refund in your name is your birthdate and SSN. Protect these numbers. When possible, have tax forms (like W-2s, 1099s, mortgage interest statements) sent to you electronically. At the very least, bring your mail in as soon as possible; thieves often steal tax forms out of mailboxes at this time of the year.

Get a PIN (when it becomes available)- The IRS is launching a pilot program where taxpayers can obtain a personal identification number (PIN) to protect their identities. This special number must be included on all tax documents. Right now the service is only available to those that filed a return from Washington DC, Florida, or Georgia last year or those that were victims of tax ID theft. Get your PIN here if you qualify. (Once you opt in, you can’t opt out.)

Don’t Use Public Wi-Fi to File- If you file online, use a secure computer and a secure network. Never use public Wi-Fi to file your taxes.

Avoid Scams- Tax themed scams are rampant this time of the year. Remember, the IRS isn’t going to call you on the phone – they communicate via snail mail. Be very careful with the sharing of personal information to keep your tax refund safe.

For more tips about protecting your refund, check out this article from Time Magazine.

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It’s Tax ID Theft Awareness Week

January 26th, 2015

Jackie here. It’s Tax Identity Theft Awareness Week. Tax identity theft is growing at astronomical rates (levels tripled from 2011 to 2012 and its just gotten worse from there). We all need to be on high alert for signs of tax ID theft. This week gives us all an excellent opportunity to think about our identities as we roll into tax season.

Help spread the word about Tax ID theft this week and keep your friends and family safe. Here are some simple things you can do in honor of Tax Identity Theft Awareness Week.

Attend a Webinar- Education is one of the best ways to protect yourself from all types of identity theft. On Tues. January 27th the FTC, AARP, and Treasury General for Tax Administration are teaming up for a great free webinar. Find the details here (webinar information is at the bottom of the page).

Share Some Tips- Are you on Facebook or Twitter? Sharing tax ID theft tips is an easy way to share this important message. Don’t worry; you don’t have to create the tips on your own. Use these from the FTC.

Start Working on Your Taxes- Filing early is one of the best things you can do to protect your taxpayer identity. Use this week to start gathering paperwork and crunching numbers so you can file as soon as possible.

How will you protect your family from tax ID theft this year?

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What Can be Done about Tax ID Theft?

October 27th, 2014

Jackie here. Tax ID theft is a growing problem. Last year, losses related to tax identity theft topped $5 billion and the number is only expected to continue rising. What can be done? The Government Accountability Office (GAO) issued a report with some recommendations to help improve the IRS’ ability to fight the fraud.

Better Tools to Catch Fraud

While the $5 billion in losses last year sounds astronomical, it is much smaller than the actual amount of fraud that was attempted. It is estimated that the IRS was able to stop $24.2 billion in fraud. The GAO believes that more tax fraud could be stopped if the IRS had the tools and the time to better evaluate refund requests.

Right now, when you file your taxes a few quick checks are performed and your refund is on its way. The GAO believes that by holding refunds until wages can be verified with employer wage reports, additional fraud could be stopped. Electronic wage reports are currently due to the government by employers no later than April 2, but at this time, about 60% of refunds have already been sent out. If this deadline were pushed up (say to the Jan 31st deadline that employers have for submitting wage reports or W-2s to employees) it may be easier to catch fraud. The GAO also recommends increased electronic filing of these records to speed accessibility of access and decrease the cost for processing the records. Delaying refunds until wages are verified could be a potential solution.

What Happens Next?

The GAO report isn’t going to immediately change any practices in the IRS. It is just a preliminary report that lawmakers and others can use to shape policy. The recommendations may now be used by Congress to make changes that will hopefully stop the huge yearly losses to tax ID theft. For more information, read this article from the Washington Post.

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Scam Alert: That Robocall Probably Isn’t the IRS

July 3rd, 2014

Jackie here. Tax season is over, but that doesn’t mean you aren’t still at risk for tax  scams. The FTC recently issued a warning about fake IRS calls that are tricking consumers into paying money they owe via prepaid cards. Be aware of this scam and keep yourself safe.

The Scam

This scam has been circulating for a few months, but seems to still be going strong. Scammers are faking caller ID information to impersonate the IRS and are threatening people with arrest, deportation and more if they don’t quickly pay up. There are several variations to scam, including ones using robocalls. One common thread each of these scams share is a demand for money paid quickly using prepaid debit cards, wire transfer or credit card.

Keeping Yourself Safe

Be aware that the IRS doesn’t ever ask people to pay tax debt using prepaid debit cards or wire transfers. If you need to be contacted about tax issues, the IRS will typically do so by mail. The IRS also doesn’t use text messaging, email or social media to request personal or financial information.

If you are worried about tax debt you may owe, contact the IRS yourself for help with payment questions. You can reach them at 800-829-1040.

If you get a suspicious call claiming to be from the IRS or the Treasury Inspector General for Tax Administration (TIGTA) report it immediately online or by calling 800-366-4484. You can also file a complaint with the FTC using their online complaint form (make sure you include IRS Telephone Scam in the notes section).

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Identity Theft and New Graduates: A Survival Guide

June 9th, 2014

Jackie here. It’s graduation season. Congratulations to all of you new graduates out there! A graduation ceremony is a rite of passage, signaling that you are done with one chapter and ready to enter another. As you clutch that diploma and prepare to start a new life, bear in mind that identity theft can strike at any time. Here are some potential ID theft pitfalls that new graduates are especially vulnerable to (for more tips check out this great article).

Tax ID Theft is No Joke

Will this be your first year earning a paycheck and filing taxes? If so, you should be aware that tax identity theft is a growing problem. Thieves like to file fraudulent tax returns to steal refunds. Filing early is one way to combat the problem. You’ll also want to get any tax help you need from a trusted, reputable source.

To Credit or Not to Credit?

My first experience with credit was a store credit card I accidentally signed up for my first semester of college. I never used it. Pre-approved credit card offers and store accounts can be tempting to the new graduate. While these may be a wise financial choice, make sure you remain in control. Choose credit cards wisely and be sure that you understand the terms before signing up. Once you have those cards, monitor them closely looking for any charges that you didn’t make. You should also check your credit reports at least once a year at

On the Job Hunt? Don’t Fall Victim to an Employment Scam

Many new graduates find themselves in need of jobs and scammers love to prey on job hunters. Keep an eye open for work from home scams. Remember, if an opportunity promises to pay well for very little work it’s probably a scam.
Protect your SSN during the job hunt process as well. You may want to hold off disclosing it until the interview stage in the hiring process. If you’re nervous about sharing your SSN with a potential employer, research them to make sure the job opportunity is legitimate.

Congratulations on your graduation and the new and exciting things coming your way… just make sure that identity theft isn’t one of them.

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Goodbye to 2014 Tax Season

April 14th, 2014

Jackie here. Have you filed your taxes yet? As tax season comes to a close we wanted to share one last post with some tax identity theft tips. We are all at risk for this ever growing problem; being aware and remaining educated is one of the best ways to protect ourselves from tax ID theft and fraud.

Finding Out You Have a Problem

How do you know if you’ve fallen victim to tax ID theft? Most people discover the problem when they go to file their taxes. You may be unable to file since a return has already been submitted with your name and SSN. Other people receive a notice that they underreported their income after they have filed (this often happens when someone is using your SSN to work illegally).

If you do discover a problem, don’t despair; there are things you can do. In January Jenna shared her story of tax ID theft which can give you a good starting point for resolving your own problem. Here are some other tips to try:

  • File a police report- A police report is often the first step resolving ID theft. While your local police probably won’t be able to do much in fixing your problem, the police report is a valuable tool you can use to prove that you are a victim when talking to credit bureaus and other agencies.
  • Review your credit- If someone uses your SSN to file taxes, they might use it for other things too. Check your credit reports carefully and look for signs of fraud. You may want to initiate a credit freeze and put fraud alerts on your credit reports as well.

While there is extra attention focused on tax identity theft during tax season, many of the things you should do to protect yourself are ongoing practices that happen all year long. Make sure you regularly check your credit report, and keep an eye on your bank statements for anything suspicious. Remember, even small amounts can idicate trouble. In addition, be cautious when clicking on links and don’t share information that isn’t absolutely necessary.

Here’s a great article about tax ID theft from ABC News.

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Big Data Joins the Tax ID Theft Fight

April 4th, 2014

Jackie here. We’ve talked quite a bit about the potential privacy pitfalls of Big Data, but what about the benefits? With huge catalogs of information about the activities, actions, and whereabouts of each American, data companies have a valuable resource that can be used to fight things like tax ID theft and fraud. This year several states have decided to partner with data collectors to fight fraudulent tax returns before the money is lost forever.

Tax identity theft is a big problem, and one that isn’t likely to go away any time soon. As identity thieves ramp up their efforts, the IRS and state governments have to find new techniques to battle this pervasive issue. Turning to data companies is a unique solution with the potential for very effective results.

Since these programs are state run, the methods of implementation can vary, but all share a common goal: to catch identity thieves before a fraudulent tax return is paid. One state uses a specially created algorithm to screen for potential problem returns. If a suspect tax return is found, a letter is sent to the taxpayer asking them to visit a website to verify their identity. In the first year of use, Georgia paid about $3 million dollars for the service which saved the state $25 million.

Tax ID theft is still a problem, but hopefully ideas like this one will help state and federal governments continue in the fight against tax ID theft. For more information about this program, check out this article from KCEN TV. Learn more about tax ID theft here.

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IRS Releases 2013 Criminal Investigation Annual Business Report

April 1st, 2014

Chris here, AllClear ID Investigator. The IRS recently released its Criminal Investigation Annual Report for fiscal year 2013. The Criminal Investigation team investigates a wide range of potential financial and tax related crimes. According to the Criminal Investigations Report, these types of crimes include money laundering, public corruption, terrorist financing, narcotics trafficking financial crimes, and identity theft.

Report Findings

The report tracks a total of 5,314 cases investigated by the Criminal Investigations team during the year. Of the 5,314 cases, 4,364 were recommended for prosecution. Almost 3,800 individuals were indicted, resulting in 3,311 convictions, a 93% conviction rate. These numbers are up across the board compared to previous years–the fiscal year 2012 saw the Criminal Investigations unit initiate 5,125 cases with 3,701 recommended for prosecution. These cases resulted in 3,390 individuals being indicted and 2,634 convictions. Of all the stats, however, the most important is the conviction rate, according to Richard Weber, Chief of Criminal Investigations: “The conviction rate is especially important because it reflects the quality of our casework, our teamwork with federal law enforcement and the U.S. Attorneys’ Offices, and represents an increase over 2011 and 2012.”

When it comes to identity theft Chief Weber maintains that it is “One of our top priorities.” In 2013 Criminal Investigations initiated 1,492 identity theft related investigations, resulting in 438 convictions. According to Chief Weber, Criminal Investigations, working in conjunction with civil tax partners, were able to catch 1.3 million fraudulent returnsbefore they were processed and prevented $7.1 billion in false refunds.

Identity theft and tax fraud is still a big problem in the U.S., but teams like IRS-Criminal Investigations are providing a much needed step in the right direction. And according to Chief Weber they only plan on getting better at detecting and preventing these criminal activities, “I am extraordinarily optimistic about the future of CI. Nothing great is ever achieved without dedication and enthusiasm, and our employees have plenty of both. We will remain the energetic, dynamic and adaptive organization that is simply the best at following the money. I am grateful for the service and dedication of all CI employees.”

If you want to read the full IRS-Criminal Investigation Report it can be found here.

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Update: Death Master File

January 24th, 2014

Jenna here. We’ve talked about proposed changes to the Social Security Administration’s Death Master File before when a new bill was under consideration to limit public access to the information in an effort to combat tax ID theft. A provision in the budget measure passed last month directly addresses this issue, limiting access to the Death Mater File to certified entities, such as life insurers and pension funds who need access to combat fraud and administer benefits properly.

Limiting access to only these entities will hopefully reduce the number of fraudulent tax returns filed annually under identities of deceased individuals. The Congressional Budget Office estimates that this measure will save the U.S. government an estimated $786 million over the next decade. To read about the provision in more detail, visit this Bloomberg article.

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ID Theft is Changing, Not Going Away

January 22nd, 2014

Jackie here. Here on the AllClear ID blog we talk a lot about ID theft including ways to protect your family, trends, scams and identity theft resources. On other sites, though, ID theft isn’t as big of a focus. While you might not be seeing identity theft news on CNN or Yahoo! every day, it’s important to remember the problem still exists. Each year, ID theft generates economic losses similar to those incurred with natural disasters (Hurricane Sandy caused $20 billion in damage; ID theft creates losses of about $20.8 billion annually). While laws are being enacted to better protect us and law enforcement is getting better at catching thieves, identity theft still wreaks havoc on lives every day. If you haven’t been a victim, you probably know someone who is.

We talk a lot about data breaches, a problem that seems to be getting worse. For the last nine years there has been an average of more than one breach each day. Due to this increase in the availability of stolen information, it is estimated that the price of an identity is just $25, less than the cost of a steak dinner.

ID Theft is Changing

While ID theft is still a big problem, it is changing. Once credit card fraud was the big worry, now tax identity theft is rising and medical records are becoming a hot target for thieves. Enforcing the law is getting more difficult too, as thieves use the internet to hide their activities and identities.

The changing landscape of ID theft makes this problem no less disastrous than it once was, but much more complex. Will we someday see the same protections on our medical records as we have on our credit reports?
While identity theft is changing, it is important to realize that it is still a problem. What can we do? Remain vigilant. Check your credit reports and bank statements. If you find an inaccuracy, report it and correct it. Don’t think your children are immune from the problem; they are at risk too. Now is not the time to stop fighting against ID theft—just because it’s not making headlines every day, doesn’t mean the risk is no longer there.

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Tax ID Theft Twitter Chat: 6 Tips to Keep You Safe

January 17th, 2014

Jackie here. As Tax Identity Theft Awareness week comes to a close, I wanted to share a few of the things I learned this week with you. The FTC and the Identity Theft Resource Center co-hosted a great Twitter chat this week; check out the hashtag #IDTheftChat for more great tips!

Don’t Carry Your Social Security Card

We’ve told you before not to carry your SSN in your wallet, but many people still do. I thought this was a great reminder to check my wallet for things that shouldn’t be in there. Other things you shouldn’t carry include bank PINs, account numbers and passwords. If you’re a business, safe guard your EIN just like you would a SSN.

Shred. Shred, Shred

The three items thieves need to commit tax ID theft are your SSN, your birth date, and your name. If you don’t shred your trash and personal information some of these will surely end up in the trash. Shredders are relatively inexpensive and are a priceless tool in fighting all types of ID theft. If you don’t have a shredder of your own, check with your local Better Business Bureau; they often host shred days with free shredding services.

Watch for Scams

All year round, but especially during tax season, thieves impersonate the IRS to get information. Watch for websites, emails, tweets and phone messages that claim to be from the IRS. If you don’t know whether something is legitimate, double check before you share personal information.

Keep Important Documents

When filing taxes you may need to hang on to some documents for several years. If you’re storing these digitally make sure they are encrypted. If you store hard copies, keep them in a secure place away from prying eyes. This neat chart was shared during the chat to help you know how long to keep each record.

Businesses Fall Victim Too

Consumers aren’t the only ones that are at risk for tax related ID theft. Businesses have risks too. The FTC shared a blog post they’ve created to help businesses understand tax ID theft. If you own a business or help manage one, this post is a must read.

File Early

Tax season is upon us so start gathering those records and file early. The sooner you file, the lower your risk for tax ID theft. When you do file use a secure connection if you file online, never public Wi-Fi. If you mail in your taxes, take them to the post office directly.

The FTC’s Twitter chat for Tax Identity Theft Awareness week was a great one. Check it out now!

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Tax Season Scams Bite Businesses

January 17th, 2014

Robert Siciliano, Identity Theft Expert

There are numerous tax related scams out there. And as a business or even a consumer, forewarned is forearmed.

Tax relief. Predators scan through tax lien notices to see who’s in deep with the IRS, then offer them tax relief services which are fraudulent. You pay them, and voila, your money not only is gone, but so is the “service.” You’re now further sunk in debt.

  • A fee, usually high, is required in advance.
  • These scams may be advertised on TV and radio.
  • They may also come as an unsolicited snail letter or e-mail, saying that you qualify for some governmental plan.
  • The company offering the solution may suddenly disappear.
  • If some kind of tax payment plan seems too good to be true, assume that it is.

IRS giving away money. When pigs fly. But really, this scam makes its rounds: flyers and ads claiming free money from Uncle Sam, suggesting you can file a return with minimal or no documentation. These postings often appear in churches. People see them and innocently spread the word.

Abuse of 501(c)(3). Numerous types of nonprofit organizations are exempt from certain kinds of federal income taxes. Some organizations will create schemes to become exempt, including ploys that fraudulently shield income from taxation.

Corporate ownership disguise. A third party is fraudulently used to request EIDs (employer identification numbers). The third parties then form corporations that muddle the business’s true ownership standing.

Trust misuse. Transferring assets into trusts may have some legitimacy, but shady promoters have also encouraged people to do this in an improper way. These transactions don’t live up to their promise of reducing taxable income or maximizing deductions for giving gifts or for personal expenses.

Inflated income & expenses. Though some businesses deflate income to lower what they owe, others will inflate it to optimize refundable credits. They may also claim expenses they never paid.

Hiding income offshore. Some people and businesses, to avoid paying taxes, hide income in offshore accounts. They use credit or debit cards, or wire transfers to gain access to their funds. Other people will use employee-leasing schemes, employ foreign trusts, or use insurance plans or private annuities to get access.

Fake forms. Someone files a false information return, like the Form 1099 Original Issue Discount, to validate a fake refund claim on a corresponding return. Some have made false claims for refunds based on the sham theory that the IRS has secret accounts for U.S. citizens and that one can gain access to these accounts with the 1099 OID form.

Ridiculous attempts at write-offs. Businesses claiming crazy, frivolous claims to avoid paying owed taxes like that business trip to Mardi Gras. The IRS will recognize many frivolous tax arguments and will toss them out of court.



Robert Siciliano is an Identity Theft Expert to AllClear ID. He is the author of 99 Things You Wish You Knew Before Your Identity Was Stolen. See him knock’em dead in this identity theft prevention video. Disclosures

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Tax Identity Theft: My Story

January 16th, 2014

Jenna here. Tax identity theft is a topic that has recently become important to me after falling victim to it last year. You may be wondering how someone with so much knowledge of identity theft fell victim to the crime and the answer is that it can happen to anyone, regardless of their level of knowledge.

How It Happened

With the help of an accountant, I prepared all of the necessary paperwork to file my tax return, and left the office feeling very accomplished—I had knocked a huge item off my to-do list. A day or two later, I received a call from my accountant to tell me that he received word from the IRS that someone had already filed a tax return under my name. Initially, I couldn’t believe this happened to me. I was aware of tax identity theft, but thought I had taken steps to prevent it by safeguarding my personal information, filing early, and using a trusted accountant.

After the initial shock wore off, I began to worry about sorting things out. How was I going to file my return? What if the issue couldn’t be resolved? How did someone get my SSN and other personal information?

Getting Things Resolved

I am happy to report that the resolution process went much smoother than I expected it to. The first thing I did was to call the IRS Identity Protection Specialized Unit at 1-800-908-4490 to see what steps I should take. The steps were surprisingly simple. I went online and downloaded the IRS Identity Theft Affidavit, Form 14039 and filled it out. Next, I made a copy of it and mailed it in to the specified address. Within a week or two, I was notified that my identity had been restored with the IRS, and I was able to file my return successfully.

While I was waiting for the news, I made sure to pull copies of my credit report (full disclaimer, I use our service, so I was able to get assistance from a colleague) to see if there was any suspicious activity—someone did use my SSN to file the return, so I wanted to be sure I was safe. Fortunately, no other activity was detected, and things are back to normal for now. Just to be safe, I did change my bank account passwords and PIN numbers.

What I Learned

This experience taught me that no one is immune to identity theft; even someone who is surrounded by it every day isn’t immune. In addition, I learned that in some cases, identity theft can be resolved successfully by taking the proper steps to detect, report, and resolve the issue. The IRS has great identity protection resources on their website that I found very helpful.

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How To Spot Tax ID Theft

January 15th, 2014

Jenna here. As this is Tax Identity Theft Awareness Week, and as we head into tax season, we think it’s important for you to know how to spot tax-related identity theft.

How to Spot It

Fortunately, tax identity theft isn’t like traditional identity theft in that it is usually discovered fairly quickly. In most cases, consumers don’t have to play detective in order to discover tax ID theft—The IRS will contact you via letter if they notice an instance of more than one person using the same SSN. Please remember that they will not contact you via email, text, or social media and that this sort of communication is likely a scam.

If someone else uses your SSN to get a job and their employer reports their income to the IRS using your SSN, the situation is a bit more complicated. Chances are, when the IRS notices that you filed your own return (which didn’t contain the fraudulent income), they will send you a letter stating that you received wages that you failed to report. If you ever receive one of these letters, do not simply disregard it and think it is a mistakecontact the IRS immediately via a verified number on their website. Be sure you keep record of your communication with them (date, time, name of the person you spoke with) to ensure the issue is resolved.

For more tips, visit this helpful FTC page.

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Prosecutions Increasing for Tax Identity Theft

January 14th, 2014

Jenna here. The IRS shed some light on the steps they are taking to crack down on tax identity theft last week and we found some of the information very interesting. Here are some key highlights from 2013:

  • The IRS launched 1,492 criminal investigations into identity theft in 2013, up 66% from the number of investigations in 2012
  • Prosecutions and indictments more than doubled
  • The IRS blocked more than $50 billion in fraudulent tax refunds
  • The IRS currently has more than 3,000 agents working to prevent tax identity theft

You can read the full article here.


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Favorite Articles for the Week of January 13th

January 13th, 2014

Jenna here. There were so many good articles to choose from this week, but we’ve managed to narrow it down to our top 3. This week, we have a look at the future of big data in 2014, a really interesting (and long—you may want to save it til after work) read about tax identity theft, and some tips for how to protect your personal information. Enjoy!

2014: The Year Big Data Adoption Goes Mainstream In The Enterprise, Forbes

Beware of Gangsters Filing Tax Returns, Bloomberg Businessweek

How To Keep Your Private Information Safe, USA Today

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Video of the Week: Stealing a Tax Refund

January 13th, 2014

Jenna here. Each week, we will be posting an intersting video clip. In honor of Tax Identity Theft Awareness Week, we chose a video that offers a sneak peak into just how easy it is to steal a tax refund.

Stealing Your Tax Refund Is Easier Than You Think, USA Today

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Tax Identity Theft: The Basics

January 13th, 2014

Jenna here. This is our first post for Tax Identity Theft Awareness Week, so we wanted to start with the basics. Tax identity theft may seem like a simple topic to understand, but there can be a lot of misinformation out there and we don’t want anyone to fall victim simply because they didn’t get the right info. The following information was disseminated by the FTC specifically for this event, so rest assured it is reliable. Be sure to check back each day for a new tax identity theft post.

What Is Tax Identity Theft?

Tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS. It also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission. The IRS says tax identity theft is a top priority and says it has hired new staff, explored new technologies, and adopted new procedures to fight it.

What You Can Do

  • File your tax return early in the tax season, if you can.
  • Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.
  • Shred copies of your tax return, drafts, or calculation sheets you no longer need.
  • Respond to all mail from the IRS as soon as possible.
  • Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.
  • Don’t give out your Social Security number (SSN) unless necessary.
  • Research a tax preparer thoroughly before you hand over personal information.
  • If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490.
  • Check your credit report at least once a year for free at to make sure no other accounts have been opened in your name.

What To Do If You Do Fall Victim

Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

More information about tax identity theft is available from the FTC at, the IRS at We’ve also talked a lot about tax identity theft on our blog. You can find your state/local office contact information here:


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FTC Tax Identity Theft Awareness Week

January 9th, 2014

Jenna here. We have exciting news! The FTC is hosting their first ever Tax Identity Theft Awareness Week January 13th-17th. That’s next week! To do our part to raise awareness about this growing issue, we will be posting helpful information and links on our blog, Facebook, Twitter, and Google+ pages every  day, so be sure to check them out for great information. To make the most out of next week, here are some helpful resources you should take a look at to ensure you don’t miss out on the action:

FTC Press Release about the event:

FTC’s Tax Identity Theft Awareness Week website:

Regional Events for Tax Identity Theft Awareness Week:

Check back next week to learn all about tax identity theft just in time for tax season!

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Where To Get Official IRS Information

January 8th, 2014

Jackie here. As we roll into the New Year, our thoughts turn to getting things in order for taxes. As tax identity theft is a big problem, it’s important to always turn to trusted sources when looking for tax information. Did you know the IRS has several different resources for you to use? Whether you like Tumblr, YouTube, iTunes, or Twitter, there’s an official IRS resource to help you get through tax season successfully. Which of these resources will you check out? Let us know which is your favorite!

  • Official Smartphone App- Interact with the IRS using your Android or IOS smartphone via the IRS2Go V3 app. With the app you can check refund status, get tax receipts, tax tips and advice and stay up to date with the latest IRS news.
  • Tumblr- If you’re on Tumblr, be sure to check out the IRS’ official page. The page was new for 2013 and already has received more than 200,000 views. One identity-friendly feature is the scam alerts and warnings posted on the site.
  • YouTube- Need help with your taxes? The more than 130 videos on the IRS YouTube channel might help. There’s even a video specifically created to help victims of ID theft.
  • Twitter- With five official IRS Twitter accounts, there’s one for every situation. For IRS news and tax related announcements follow @IRSnews or @IRSenEspanol.  Tax preparers might also be interested in @IRStaxpros and job seekers can find information at @RecruitmentIRS. The final Twitter page is devoted to the IRS Taxpayer Advocate Service and is found @YourVoiceAtIRS.
  • iTunes- Love Podcasts? Check out the IRS collection of helpful audio files. We recommend “Protect Yourself from Identity Theft” and “Are You a Victim of Identity Theft?”
  • Facebook- Although not commonly updated, the IRS official Facebook page is available for those that want to interact with the agency; you’ll likely get more information, however, by accessing some of their other informational channels.

As you get ready for tax season, check out these helpful IRS resources; be on the lookout for ID theft warnings and scam alerts from us as well!

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ID Theft Trend Predictions for 2014

January 1st, 2014

Jackie here. As we say goodbye to 2013 and welcome in the new year, it’s always interesting to look back on ID theft trends and make a few predictions for the coming year. Let’s take a quick look at our list of threats and predictions
for last year
… did they pan out? Then I’ll give you a few predictions for the ID theft trends that may be coming in the future.

  • “Child ID Theft Will Continue to Rise”- Although the numbers aren’t out yet showing the number of child ID theft victims in 2013, a 2012 report found that the problem was certainly prevalent. The study found that 2.5% of U.S. households with children had experienced child identity fraud at some point. Legislators have been passing child ID theft laws as well. This year, several states either passed or are working on laws to allow parents to freeze their children’s credit, requiring foster agencies to help clean up children’s credit reports and creating child ID theft prevention programs.
  • “Monetization of Social Networks”- Social networks certainly expanded their money making efforts this last year. Twitter went public with their stock, generating a few IPO related scams along the way. Social media scams are still big business for scammers, so keep an eye open for offers of fake gift cards, airline miles, etc. in the coming year too.
  • Tax ID Theft- Tax ID theft continues to be a problem. As the numbers roll in for 2013, we are seeing fairly large increases in the tax ID theft rates across states. In all of 2012 there were 1.2 million taxpayers with tax id theft problems. In just the first 6 months of 2013, there were 1.6 million victims.

Now that we’ve reviewed a few of last year’s predictions, let’s move on to what we see coming as we roll into 2014.

  • More Companies Shift to the Cloud- Industry leaders predict that companies will continue to shift their data storage needs to the cloud. What does this mean for you? It means increased risk. When information is stored online it can be accessed from anywhere, both by the companies themselves and by hackers. Sure, it’s convenient, but it also means an increased risk of data breaches and security incidents related to data stored in the cloud.
  • Mobile Malware- The days of not having to worry about viruses on your mobile phone are coming to an end. It’s likely that we will see increases in mobile malware, especially on Android phones. If you haven’t secured your phone yet, do so. Thieves always like an easy target.  This fact sheet from the Privacy Rights Clearinghouse has some great tips for securing your smartphone.
  • Passwords That Aren’t Passwords- People are notorious for creating bad passwords (think “password” or “1234567”). As companies seek to create more secure devices and accounts, this means finding solutions to the password that aren’t as easy to compromise. Biometric technologies are one possible solution. Maybe in 2014 we will see a smartphone that uses a heartbeat for identification or an online bank account that uses fingerprints to log you in.
  • Increased Medical ID Theft- As medical records continue to shift online, the odds of a medical record breach continue to increase. Medical professionals have been warned to expect increased data security risks for 2014.
  • Increased Mobile Payment Fraud- It is expected that the mobile payment industry will grow by more than 30% a year for the next several years. As this payment method grows, thieves will likely get in on the action too, leading to an increase in mobile payment fraud.

May your 2014 be filled with health and happiness and, of course, be ID theft free.

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Report: Tax ID Theft Still on the Rise

December 13th, 2013

Jackie here. We talk a lot about tax ID theft during tax time, but it’s important to remember that this isn’t just a problem come April. Tax ID theft is a year round problem and one that’s getting worse each year. Recently the Treasury
Inspector General for Tax Administration (TIGTA) published a statement showing how bad the problem has become
. Tax related ID theft is at all-time high this year.

In just the first 6 months of 2013, about 1.6 million Americans fell victim to ID theft/tax refund crimes compared with 1.2 million taxpayers in all of 2012. This is a marked increase of an already large problem. I’m interested to see what the final number for 2013 will be, but all signs indicate that it will be much higher than in 2012.

While the increase in number of victims is concerning, there is some good news in the TIGTA report. Although there were more victims, the total amount lost fell substantially. Since we all bear the burden of stolen taxpayer money, this is great news for taxpayers across the country. In 2011, the government lost $3.6 billion in fraudulent tax returns, down from $5.2 billion the year before. It’s still a lot of money lost to fraud, but decreasing nevertheless.

In the coming years we’ll likely see the IRS institute more fraud protections to keep refunds safe and to minimize the amount lost to this growing crime. One of the biggest things you as a consumer can do is file early… start getting your tax information ready now so you’ll be ready come next year. Our tax ID theft section of our blog linked to at the start of this post has great tips for keeping your information safe as well.

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Tax ID Theft: What’s Being Done?

September 18th, 2013

Jackie here. Tax ID theft is a growing problem and this year the IRS stepped up their efforts to combat and catch perpetrators of this crime. Hopefully, the renewed fight against tax ID theft will soon result in fewer victims and fewer hassles come tax time.

What is the IRS Doing?

During the 2012 fiscal year, there were approximately 450,000 tax related ID theft complaints, an increase of 78% from the previous year. This huge jump indicates the growing problem that is tax ID theft, and highlights the difficulty in fighting the problem. There is no simple solution to tax ID theft. You can do your part by filing early and keeping your personal information as secure as possible.

With a problem as pervasive as tax ID theft, sheer manpower is essential in combating it. The IRS has doubled the number of employees working on tax fraud, bringing the total more than 3,000. Additionally, they are opening more cases than in years past.

Budget cuts remain a problem for the IRS, just as with many other government agencies. New budget proposals have potential cuts included in them which could make it difficult to keep up fraud prevention efforts by the IRS.

Tax ID theft is a serious problem, but it’s good to know the IRS is working hard to fight it. Learn more here.

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Gangs Want Your Identity?

July 30th, 2013

Juan here, AllClear ID Investigator. Gangs and organized crime syndicates are more emboldened than ever to commit ID theft. Like any business, a gang is organized to make money, and id theft is just another way for them to do that. Gangs make money by committing ID theft in a variety of ways, ranging from fraudulent tax filings, stealing Social Security checks and other benefits from the elderly, and of course, by opening lines of credit in your name.

To commit fraud and ID theft, gangs must first get ahold of people’s personal information. Recently, the trend has been to have girlfriends or female gang members get jobs as data entry clerks, administrators, or receptionists. They show up for a couple days of work, copy the information of random people or download it to a flashdrive, then they never show up again. Sometimes, the company may take months to figure out what happened, or they may never know at all.

What About the Victims?

When a victim of ID theft successfully restores their identity, they are cleared of any responsibility to fraudulent charges and debts. Let’s say, for example, that a credit card was opened in your name, $5300 charged, but you were able to prove  that you were the victim of fraud and are cleared of all responsibility for repayment. Next, the creditor asuumes reponsibility for the debt, and owes the $5300 charged on the card. At that point, the creditor more than likely has information as to who the suspect is and where they live. It is up to them, however, to decide to contact law enforcement or to pursue the id thief criminally. In many instances, the time and money a creditor must spend to bring charges against the gang or id thief is not worth the amount of money stolen, and creditors simply decide not to press charges or file a criminal complaint.

Even when the crime is a fraudulent tax filing used to commit tax id theft, the chance of being pursued criminally by the IRS for a filing of $500 to $2500 is almost non-existent. “The only thing you can try to do is complete the refund in January, before anyone else can file in your name,” according to Detective Craig Catlin with the North Miami Beach Police Department. Ultimately, many creditors, and even the IRS, often do not have incentives to take any criminal action against id thieves. Gangs are beginning to recognize this, and are using it to their advantage, committing more id theft than ever before.

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Top 3 Articles for the week of July 8

July 8th, 2013

Jenna here. As promised, here are our favorite articles for this week. Privacy, Facebook Graph Search, and tax id theft risk factors made the cut this week. Enjoy the information!

It seems every time I go out to shop now, retailers ask me to provide them with my zip code when I make a purchase. At first, I thought nothing of it. But after reading this article from Forbes, I discovered that sharing my zip code may actually be the final piece of the puzzle marketers, advertisers, and even id thieves need to know my name, address, phone number, and other personal information. Find out the full story about why you should be more cautious when giving out your zip code here:

Never Give Stores Your ZIP Code. Here’s Why, Forbes

Facebook rolled out its Graph Search feature to all users who view the site in English this morning, making it easier than ever for users to search and be searched for. The new feature combines likes, location data, photo tags, and pages you follow into a giant search engine tool, and allows people to search for information such as “pictures taken in Austin, TX”, and view photos taken by strangers with the location tracking feature on (provided they are made public). Facebook urges users to review their privacy settings as this feature becomes available to more users:

Facebook Graph Search opens up its doors; mobile version coming soon, Washington Post

While the 2013 tax season is over for many of us, if you filed an extension you have a few more months to get your taxes submitted. Even if you have already submitted your taxes this year, these tips will help keep your id (and your tax return) safe from theft in years to come:

10 Ways to Become a Victim of Tax Identity Theft, Forbes

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Big Data: A New Tool for the IRS?

May 15th, 2013

Jackie here. We’ve talked a lot about the IRS and tax related id theft this year, but today we’d like to explore the IRS in a whole new light. According to this article, they have recently unveiled plans to use “Big Data” and online tracking to better discover tax cheats. What implications will this have for your privacy? Will this new program help stop the growing problem of tax id theft?

The Internet- A New Tool for the IRS

Using the internet to track and find tax cheats is a new method for the IRS. In the past, they would occasionally turn to online transactions to prove fraud but they have never before used online tracking to audit consumers. The “robo-audit”, as some have called the auditing style, could change the way the IRS conducts audits and could lead to a great deal of personal information being shared with the agency.

Privacy Concerns with the “Robo-Audit”

There are some very legitimate privacy concerns associated with this new way of conducting an audit. We’ve talked about the dangers of “Big Data” and the IRS’ program has the potential to create many more privacy problems. They will have access to all the information that data marketers do, plus the personal and confidential information that the IRS can access, like social security numbers, financial information, health records, and more.
The IRS has disclosed little about this new program, but what we do know is that information will be gathered using tactics like digital tracking and specialized computer programs will find discrepancies and problems to flag for IRS employees. Things like social media, internet purchasing, online banking, etc. could be used to gather information for these online audits. Much of the work will be automated, and computerized audits will become more prevalent than they have been in years past.

Scanning digital records and tracking internet behavior could potentially help the IRS recover more taxes, while saving time over in-person audits. However, it does have the potential to be a privacy nightmare and to force consumers into sharing more of their private data than ever before.

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Truncated Taxpayer Identification Numbers: What Are They?

May 15th, 2013

Juan here, AllClear ID Investigations. A major problem for many consumers over the years has been a lost or stolen W-2 form, as it contains not only personal information such as name and address, but also a complete Social Security number. It seems the IRS has taken notice of this problem, and now has a functional solution.

The idea is to allow certain businesses and organizations to provide individual tax filers with statements showing a “truncated taxpayer identification number” – or TTIN. While traditional W-2 forms will still be used, and will still contain a full SSN, employers will be able to provide statements related to income, annuities, and other financial matters using a TTIN, and not the full SSN.

The proposed changes would only affect filers of certain information returns.  The TTIN can be used with 1099, 1098, and 5498 forms.  It cannot be used with 1098-C forms.

The truncated taxpayer identification system began to be tested several years ago, due to a growing occurence of tax fraud and tax id theft.  In an IRS statement, they recognized that the paper payee statements for individuals pose the greatest risk for potential fraud.

Of course, this sort of program does have its critics, and in this case, those are state tax boards.  Their concern centers around whether this truncation of the SSN would affect state income tax returns.  The IRS, however, concluded that state tax filings would be unaffected, since those filings are mostly done using W-2 forms, which will not be part of the truncation program.

Overall, the truncated taxpayer identification numbers seem to benefit the IRS, who loses money ever year due to fraudulent filings, as well as consumers, who may have a lower risk associated with filing taxes under the new system.

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More States Signing on to LexisNexis Identity Theft Protection System

April 9th, 2013

George here, AllClear ID Investigations. Every year around tax filing time, many consumers become victims of tax fraud. The IRS has no way of preemptively stopping it unless you’re a previous victim; in that case, they issue a 4 digit pin number to file next year’s taxes with. National taxpayer advocate Nina Olson reported this year that identity theft related tax refund fraud has increased 650% since 2008.

LexisNexis, a public records data base and identity management systems company, has expanded a pilot program they tested in Georgia last tax season to help fight tax fraud to four additional states. LexisNexis Tax Refund Investigative Solution program has been expanded to Connecticut, South Carolina, and two other unnamed states.

Before this system was introduced, all US states used rules-based fraud filters to screen for identity theft. This means that if a name and an address had never before been associated on tax returns, the IRS had no way of knowing.  However, a search through LexisNexis would immediately raise red flags that this address has never been associated to this person, and would ask additional verification questions based on public records history.

They have a hard time seeing the full picture of the person,” said Andy Bucholz, director of tax and revenue markets at LexisNexis Risk Solutions. “An identity company like us will have a more complete view of a person.”

About the Program

LexisNexis Tax Refund Investigative Solution uses identity-based filters, which screen tax refund requests against billions of LexisNexis identity records collected from public databases and commercial sources. The LexisNexis system will look for mismatches on names, DOB, social security numbers, addresses, and other data, to ensure that the tax records and person filing them are a legitimate match. If flags are raised, further authentication is required, and the taxpayer is sent a letter stating there was a problem with the refund. The letter would request the taxpayer to visit the state’s IRS website, log in and answer questions based on the public records provided by LexisNexis.

In this age of cyber space, personal information is everywhere. Some of the information is protected by website security, a private company, or state records databases, but some of it is left unguarded. The LexisNexis Tax Refund Investigative Solution is an additional defense against tax id theft the IRS can use to fight this growing problem.

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