No, the title isn’t meant to be misleading or funny, it is 100% accurate. Thanks to the new mandates by the IRS for e-filing tax returns, I have had the fortunate (or unfortunate depending on how you look at it) experience of uncovering attempts to steal the identities of two clients. This normally wouldn’t be newsworthy except for two small facts: there are still a number of people who are technophobes and a number of tax preparers don’t like the fact that they are forced into filing electronically. The scary truth of the matter is that I really believe that many more instances like the ones I discovered will start occurring as the electronic filing requirement fully kicks in to the point of every return being filed in this manner.
The Dilemma
The way it came about was simple enough. During two routine tax filings, I sent them in without any indication of anything being wrong. No red flags, no points that needed review, no questions, nothing. Everything was great. That was until the following day when I checked the status of my filings and found two rejections. Both had reject reasons of the social security number already being on a return that was filed for the current year. Really?! Had I sent them in twice by accident? Nope, and you better believe that I quadruple checked everything after this. After some time on the phone with the clients and the IRS, it turns out that both of these people, who happen to be single women if that has anything to do with identity theft statistics (which I’m not sure about just yet), had returns with the same names and social security numbers filed previously.
The problem is that since someone else filed the false returns, the IRS cannot legally or ethically give out any information to anyone other than the taxpayer or the authorized 3rd party. And, even if they could, we couldn’t get a hold of them right now because they are in the process of being handled by the fraud department, who will “send out a letter when they’re don with the initial review to update us on the status”. Hopefully, the persons who filed the fraudulent returns were stupid enough to do so in a manner that can be tracked back to them. But, the real problem is that both ladies had pretty significant refunds coming their way. One of the victims is 93 and from all accounts is starting to lose it a little bit, so the faster this gets resolved the better!
The Silver Lining
I’m more of a realest, but try to find the bright side of any given situation, and this is certainly no different. There is a very positive outcome and that is the fact that this was detected now. It could have very easily gone on for months and months without anyone being the wiser, which could be very damaging. Trade lines could have been opened, maxed out, and abandoned destroying an innocent victim’s credit and what’s worse, possible costing them hundreds of dollars in possible legal & professional fees to get things sorted out. Steps have already been taken to close accounts, notify financial institutions, credit bureaus, creditors, etc. and the damage is being minimized (although at this point, there doesn’t seem to be any real fraudulent activity). It’s always important to catch these types of things early, and surprisingly enough, with the help of the IRS, we actually did (or so it seems)!
The Takeaway
Basically, everyone needs to be extra careful when it comes to their credit, identity, personal information, etc. With that in mind educate yourself as best you can and make sure to take advantage of things like the free annual credit report to ensure that nothing fishy is going on. To help clients, over at the GreenBridge Advisors company site I have compiled a list of resources as well as a mini-guide to give out some free advice and assistance. Ultimately, it’s going to be impossible to be completely secure, but we can make it hard as hell for anyone who want to try to take their identity.
About Eric J. Nisall
