States Delaying Tax Refunds To Protect Against Fraud
In 2012, international hackers penetrated the South Carolina Department of Revenue system and gained access to nearly 3.6 million tax returns from as far back as 1998. This was a wake up call, not only for the South Carolina government, but for the entire nation. Since then, nearly all states have beefed up security surrounding their tax & revenue collection agencies and identity theft prevention has finally become a top priority. This year, South Carolina and other states are implementing a new tax fraud detection process that will hopefully make it more difficult for criminals to file fraudulent tax returns using other peoples information. Unfortunately, this is going to delay tax refunds to many Americans, which is likely to not be received warmly.
However, these identity theft protection steps are essential to protect individuals against, not only identity theft, but tax fraud and insurance fraud. In 2013, the IRS identified nearly 3 million potentially fraudulent tax returns. Nearly 5 billion dollars was paid out in fraudulent returns that year alone. That’s 5 billion..with a B. You can read more about the South Carolina tax fraud situation here.
Thing to look out for this tax season.
Always ensure your tax documents are kept secure and under your control at all times. They contain your social security number and other sensitive information that you don’t want falling into the wrong hands.
If you’re going to be mailing your tax preparation information to a CPA or service, drop your documents at the post office, instead of mailing directly from your home mailbox. This is much more secure and will prevent your information being compromised by mail theft.
If you receive an unexpected letter or notice from the IRS, this could be because someone else has already filed a tax return using your social security number. Contact the IRS immediately at 1-800-908-4490 to determine if this is the case. IRS agents will work with you to ensure you properly file your tax return and receive any refunds that are due.
The IRS will never correspond with you regarding identity theft via email or text. If you receive a suspicious looking text or email, it’s likely a tax fraud phishing scam. Forward it to [email protected]
If you need a reasonable priced tax service that will get you all of the refund to which you’re entitled, I always recommend H&R Block. They’re professional and affordable and can handle nearly any tax prep situation. You can file online, fast & extremely simple.