Compliance Blog

Written by Shari R. Pogach, Regulatory Paralegal

Tax time is open season for identity thieves.  The most common form of identity theft complaint reported to the Federal Trade Commission in 2014 was tax-related identity theft.  According to FTC statistics, the FTC received 2,545 complaints about Internal Revenue Service (IRS) about IRS imposter scams but the number of complaints jumped to 54,690 in 2014.  Of the 332,646 overall complaints about identity theft received by the FTC in 2014, 109,063 or 32.8 percent were about tax identity theft. 

Tax identity theft usually occurs when a scammer files a fraudulent tax return using a consumer’s Social Security number in order to get a refund.  In IRS impersonation scams, a person will generally contact a consumer by phone, claiming they are an IRS agent and the consumer owes the agency money.  The callers then suggest the consumers pay by wiring money or loading money on a pre-paid debit card.  The calls may seem to be from Washington, DC, numbers and such callers will often threaten arrest or legal action. In addition, the scammers may even know a consumer’s full or partial Social Security number.  Complaints related to IRS impersonation indicate this technique is being used across the country against consumers. 

Fake emails or websites are also used to “phish” for valuable personal information. Phishing scams are typically carried out with the use of unsolicited email or a fake website posing as a legitimate site to lure potential victims to give out personal and financial information.  This is then used to commit identity or financial theft.  The IRS continues to include phishing on its annual list of “Dirty Dozen” tax scams for the 2015 filing season.  

Such scams prey on consumers’ lack of knowledge about how the IRS contacts taxpayers.  Consumers should be aware that the IRS will never call about unpaid taxes or penalties.  The IRS also generally does not initiate contact with a taxpayer by email to request personal or financial information, including any type of electronic communication, such as text messages and social media channels. 

The National Credit Union Administration (NCUA) notes that identity theft is a large and growing problem with more than 16 million Americans victimized in 2012.  The IRS has estimated it paid more than $5 billion in fraudulent tax refunds in 2013.  

To help educate consumers, protect themselves and take action if they believe they have been victimized, the FTC, IRS and NCUA offer the following resources:

 IRS

Warning about Phone Scam

Report Phishing and Online Scams

YouTube Videos – Identity Theft

FTC

Identity Theft

Tax-Related Identity Theft

NCUA

mycreditunion.gov - Prevent Identity Theft

mycreditunion.gov - Frauds and Scams

NCUA YouTube Channel Frauds and Scams

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