Identity theft fraudsters used to steal consumers’ credit card information and run up charges. They still do, but now the fraudsters are stealing identity information to file fraudulent tax returns to get tax refunds in large numbers. In 2015, about 43% of the Federal Trade Commission’s complaints were related to use of stolen identities to get others’ tax refunds. Fraudsters also use someone else’s children as dependents in filing their tax returns to lessen their tax liability. Other crooks claim a tax refund using a deceased taxpayer’s information. Still others give their employers’ other persons’ social security numbers when providing information for wages.
In 2015, the FTC received 490,220 consumer complaints for identity theft of which 228,854 complaints were for tax or wage identity theft.
Fraudsters are increasingly calling taxpayers on the phone claiming to be IRS employees. The fraudsters try to intimidate people into agreeing to give out their credit card information leading to fraudulent charges on the card. The fraudsters tell people things like the sheriff will be coming to the door or they will go to jail if they don’t agree to pay immediately. (IRS never calls consumers to demand tax payments. If anyone wants to know if they owe taxes, they can call IRS at 1.800.829.1040).