Officials warn about tax refund fraud


Taxpayers should be aware of the threat of identity thieves stealing their identification and filing a phony tax return in their name.


Staff Writer

Wednesday, February 7, 2018

With tax season in full swing, people in the Twin Counties looking to get a tax refund this year from the Internal Revenue Service should be aware of thieves stealing their identification and filing a phony tax return in their name.

Kathy Kraeblen, a senior wealth strategist with PNC Wealth Management, said tax refund identity theft happens when someone uses a person’s identifying information such as their name, date of birth or Social Security number without permission to commit fraud or other crimes.

Kraeblen added a lot of people aren’t aware that identity theft can come in the form of someone fraudulently filing a tax return using their Social Security number, which is important to protect and keep secure at all times.

“We think more of identity theft being more of somebody has gotten someone’s identity and using it to open up a credit card in their name,” Kraeblen said. “But this thing with tax returns is real and it happens. It’s possible people can do this and they don’t need a lot information other than your Social Security number (and) name because they can put in a fake employer, fake wages and they can file a false return. They may be able to do it before you file your own return.”

The common warning signs that a person could be a victim of tax refund identity theft include getting a rejected tax return due to a previously filed return under the same Social Security number, strange wages or receiving wages or income from an unknown employer that you didn’t work for, additional collection attempts from the IRS that could indicate a fraudster is using your Social Security number and unpaid taxes in your child’s name, Kraeblen said.

She said in some cases involving children, the fraud could go unnoticed for years and might not come out until later — for example, Kraeblen added, when a child is older and tries to apply for a credit card when he or she is in college but is denied and learns that their credit is bad.

“Identity thieves can use a child’s Social Security number to file fraudulent tax returns and secure fraudulent credit and debit cards that can often go undetected for years,” Kraeblen said. “If you receive an IRS notification about unpaid taxes in your child’s name, it may indicate their identity has been stolen. One of the things people can do is put a freeze on their and their children’s credit with a free credit reporting agency that will prevent people from being able to open an account in their name or their children’s name. It may cost them a few dollars, but it’s worth it because your identity and your child’s identity being stolen is far worse.”

According to the IRS, 376,000 taxpayers reported falling victim to tax refund identity fraud in 2016, a 46 percent drop from 2015. 

“While the declines are promising, taxpayers should remain aware that tax refund identity theft is still possible, even as the IRS plans to roll out additional safeguards for the 2018 tax filing season,” said Trevor Buxton, certified fraud examiner and fraud awareness manager at PNC Bank. “The most important point every taxpayer needs to remember is that the IRS will first contact you in writing through the United States Postal Service, not by telephone, email or other electronic means.”

PNC Bank officials said there are other ways for people to protect their identity such as filing their tax return early before an identity thief has the chance to file a fake one, use security software with firewall and anti-virus protections when accessing the Internet, use strong passwords for online accounts with at least 10 characters and alpha-numeric, mixed case and special characters, spot and avoid phishing emails, SMisShing text messages, and vishing phone calls, never click links or download attachments from suspicious emails and keep past tax records safe and secure.