While it can be tempting to wait until the April 18 deadline gets closer, you should seriously consider getting it done as soon as possible. After all, you can bet that identity thieves will be looking to exploit the tax filing system as soon as they can, and you could end up a potential target if you are not careful.
Tax fraud still a big problem
Though it is technically possible to file taxes in mid-January, most people don’t get around to it for a few more weeks or months. This isn’t necessarily due to procrastination — often, our employers don’t mail out the documents we need right away. While this may be a minor inconvenience for filers, it presents an opportunity for identity thieves seeking to file false returns. They don’t need to wait for official forms, since they can just invent the information. Their goal is simply to get the paperwork filed as soon as possible so they can steal your tax return before you ever notice that something is amiss.
“As long as the thief files before the actual taxpayer they have a chance of getting away with the theft,” tax attorney Paul Mancinone told 22News. “And that’s why they tend to file immediately, when most of us don’t have the luxury of doing so.”
To its credit, the IRS has focused on the importance of combating tax filing fraud in recent years. Thousands of agents work to protect our identities against theft. But some of their security systems still have holes, and sometimes the worst instances of identity theft can come from within the agency itself.
IRS employee charged with identity theft and tax fraud
This January, a federal grand jury indicted an IRS employee and two others who are accused of creating fraudulent tax returns under other people’s names and using them to collect refunds totaling at least $1 million between 2008 and 2011. Ironically, the IRS employee’s job at the agency was to assist taxpayers who had experienced problems with identity theft in the past.
Prosecutors say that the employee accessed IRS computers to obtain the names, birth dates and Social Security Numbers of taxpayers, and then used this information to prepare tax returns and file them electronically. As the actual individuals named had not filed yet, these returns typically went through.
It’s important for all taxpayers to remember that their information is never completely safe. If you have concerns about identity theft, invest in an identity theft protection service, which monitor credit, Social Security Numbers and public records and can notify you of certain activity that may indicate fraud.