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The Resource Center Credit Fraud & Credit Monitoring | article

Tax Fraud is a "Growing Epidemic," According to the IRS

Identity theft is a serious and growing crime that seems to affect more and more individuals on a yearly basis than almost any other white collar offense. According to recent data from the Treasury Inspector General for Tax Administration (TIGTA) and the U.S. Internal Revenue Service (IRS), the occurrence of identity theft taking place on an annual basis has crossed the line into becoming a full-on epidemic.

In 2012, TIGTA and the IRS found that more than 1.2 million taxpayers were victims of ID theft and tax refund crimes in 2012. However, as alarming as these figures may be, that is nothing compared to the fact that the first six months of 2013 alone, saw an estimated 1.6 million individuals defrauded.  In other words, we are currently on track to double 2012’s statistic.

Tax fraud happens when opportunistic thieves cash in on others potential refund checks by filing fraudulent tax returns. In many cases, these victims don’t even discover the theft until much later when they go to file their own tax return but are informed by the government that someone else has already done so using their personal identification information, and that their money is likely already spent.

It’s not your friends and neighbors taking advantage of this crime, though, as TIGTA found that international addresses are actually used to perpetrate this crime more than any locale in the United States. In 2011, for example, a single address in Lithuania was able to cash in on more than $220,000 in IRS refunds, while another destination in Shanghai enjoyed a hefty $156,000.

It’s impossible to completely prevent or protect yourself from identity theft, but homeowners can very easily take steps to help them find out about potential theft sooner, which will give them the upper hand in digging out from under the mess. By enlisting in a credit monitoring service, you can ensure that a second set of eyes is watching over your finances to alert you to certain activity that could potentially be a sign of theft.