State Police out of Newport said they are investigating the identity theft of a man from Tuscarora Township, Perry County. Authorities said it appears when the man filed his federal tax return on TurboTax.com, the file was rejected because it was marked as already filed.
Sarah Bradshaw with Liberty Tax Service along Paxton Street in Harrisburg said several customers have had a similar experience with stolen social security numbers.
“One slip of your social security number to the wrong person, the next thing you know, they’re able to file on TurboTax or they’re able to file online,” she said. “They’re able to do whatever.”
Bradshaw said the worst part of her job is informing people their return has been rejected because of identity theft.
“They look at you like you’ve got six heads,” she said. “’Well, what do you mean, I just sat here and filed. I don’t understand’.”
According to the Federal Trade Commissioner, the Internal Revenue Service does not verify who files the return. The Government Accountability Office reported in 2013 the practice led to three million fraudulent filings, which refunded $5.2 billion to crooks.
John Abel with the Pennsylvania Attorney General’s Office said these types of scams steal money when people rely on the refunds the most.
“All of which can cause a lot of anxiety,” he said.
The feds explain most criminals use a government loophole to get a jumpstart on defrauding federal returns. Employers are required by law to mail employees’ W2s by the end of January, but they are not required to submit official wages until the end of March. Most people tend to wait towards to the April 15th tax filing deadline, giving the crooks a window of opportunity.
FTC Privacy Division Associate Director Maneesha Mithal spoke with abc News last year about this type of scam.
“These days you don’t have to submit a paper copy of your W2,” she said. “So, a thief can basically make up all the information and get a tax refund in your name.”
Abel said the same person can scam multiple taxpayers at once.
“That’s something really unfortunate about this, that the people are very good at what they do,” he said.
Congress has enacted laws, which promotes the IRS to hand out fast refunds to taxpayers. And, according to an internal IRS memo, Congress slashed the agency’s budget to the lowest since 1998.
IRS Commissioner John A. Koskinen was reported saying IRS agents were told to do less with less. He said Congress could pass laws which require a verification process, but has failed.
Bradshaw said another growing issue involved people’s children being fraudulently used as dependents to get higher refunds, which demands further need for verification. She suggested a series of security questions, like most banks use, could help protect taxpayers’ hard-earned refunds.
“Just half a dozen questions to verify somebody’s identity,” she said. “I think would be extremely helpful.
Authorities suggest taxpayers fill out their W2s as soon as they get them in the mail to decrease the window of opportunity for crooks. They also suggested refunds not be loaded onto a gift card or cash card.