Tax-Fraud Recovery Influenced by Obstacles and Personal Finance

Kimberly Watson, Editor in Chief
June 18, 2012 /

What would you do if you tried to file your tax return and kept receiving an error message, advising you to check your social security number! Probably the first inclination would be to suppose that the IRS had a minor problem; but it was not serious as this type of message had been experienced before.

However, this message shows that there is a potential case of tax fraud. Taxpayers receive this type of message, when their identity has been used to file a bogus tax return, or for the purpose of collecting a tax refund.

Should you be among the many tax payers who have had their Social security number stolen; you will have to provide proof of your identity to the IRS. Until that happens, any refund due to you will be placed on hold. This action would be followed by assuring that this form of tax fraud has not been extended further into your financial assets.

Tax fraud has been associated with fake Federal returns for a significant time and is now attaining epidemic levels. In a reported speech made by the IRS Deputy Commissioner, it was stated that 2.6 million filed returns this year are being reviewed for identity fraud. An estimated $330 million is expected to be spent in 2012, to combat the problem.

It is frequently stated by victims of tax fraud, that they have no perception as to how the perpetrators obtained their Social security numbers. In possession of a number, W-2 information can be fabricated, the return submitted, before the tax payer files. Any refund due is then deposited directly to a debit card.

General complaints from tax payers regarding tax fraud include inconsistent responses from the IRS. One was that an Identity Protection Personal Number would be issued for filing purposes. Another IRS representative stated this was not the case!

 

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