Drake Software blog for tax pros, covering tax, IRS news, and more

Identity Theft to Blame for Refund Delays

Identity Theft to Blame for Refund Delays

Although most everyone is aware of the dangers of identity theft, the IRS is expecting difficulties in wading through all of the tax returns that are to be filed this year. The hardest part will be trying to spot the fraudulent claims and stolen identities amongst the legitimate returns. Unfortunately, last year identity theft rose 78 percent from the previous year, and is expected to continue its growing trend in 2013. The IRS still expects to meet its goal of returning 90 percent of refunds within 21 days, but to do so will be no small task. Victims of identity theft will likely have to wait several months for their refunds, in order for the IRS to properly look into their case.

Early returns that are being filed are expected to be so great that the many tax offices are staying open from 6 a.m. to midnight during the week. Drake Software employees expect to work 60+ hours through the week during tax season in order to keep up with the heavy amount of returns, especially at the beginning of tax season.

 

What You Need to Know

What people may not realize are some of the facts about identity theft. Children are the most likely targets; in fact, 1 in 10 children will fall victim to identity theft this tax season. A child is 51x more likely to be a victim of identity theft than an adult. Children are easy targets, and considering how many children are consistently online, their information is not as secure as some parents might think. 7.3 million Facebook users are under the age of 13, and at that age, most kids are not cautious with what information they share with the online world.

People who are looking to steal someone’s identity general obtain their information from confidential documents, such as doctor’s office forms and payroll documents. Once they have the information they need, they will send one false return into a tax office as a test. If it succeeds, they will usually send up to 50 false returns out to various tax prep offices, claiming hundreds of thousands of dollars from them. To make matters worse for those who have their identity stolen, their real returns will take several months because the IRS will have to look into their case extensively.

 

What is Being Done?

The IRS has implemented certain “filters” in order to try and flag claims that may be fraudulent. The have more in place this year than ever before, but as the IRS gets smarter and more aware, the identity thieves find different ways to try and fool them. The IRS has decided to use new ways to flag deceased persons who need to have a final tax return filed, so that the identity of the dead person cannot be used to file a return after 2013.

The IRS doubled the amount of employees they had focused on identity theft in 2012 from the previous year. Identity theft cases are especially difficult to solve, and take some time, but with more manpower and better filters set in place, they hope to stop most cases in their tracks. If you think you may be a victim of identity theft, you can call 1-800-908-4490 ext 245. By being aware of the risks and what can be done to prevent identity theft, you lower the risk of becoming a victim.

By Katie Sapp, Freelance Writer

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