Identity Theft Targeted by IRS and Other Government Agencies

A good news story from the government! Over the past few weeks, the IRS, Justice Department Tax Division, and local U.S. Attorney General Offices have conducted several sweeps nationwide to catch identity thieves and they also stopped by several check-cashing services to ensure compliance with federal check-cashing laws. These efforts have resulted in multiple arrests, indictments and charges.  In addition, these agencies state that this is just the beginning of enhanced efforts to curb identity thefts:

“This unprecedented effort against identity theft sends a strong, unmistakable message to anyone considering participating in a refund fraud scheme this tax season,” said IRS Commissioner Doug Shulman. “We are aggressively pursuing cases across the nation with the Justice Department, and people will be going to jail. This is part of a much wider effort underway at the IRS to help protect taxpayers.”

“The Justice Department is working closely with the IRS to investigate, prosecute, and punish tax refund crimes committed through the theft of identities,” said Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division. “Now, more than ever, we must remain vigilant against the unauthorized use of identification information to defraud the U.S. government.”

Identity theft is one of the fastest growing crimes and tax returns/refunds are a prime target. In 2010, it is estimated that nearly 12 million Americans were victims of identity theft (per Although most identity theft involves checking accounts (unlawful withdrawals or setting up new accounts in a person’s name), another type of ID theft is the unlawful use of Social Security numbers to obtain tax refunds.

What has happened is a person files a tax return (either paper copy or electronic) and it ‘bounces’ because a Social Security Number (SSN) has previously been used on a tax return. Usually this happens because a person submits a tax return using a phony SSN to get an exemption and/or refund.  The IRS computers currently don’t check to see if the date-of-birth (DOB) on the tax return matches the Social Security records for each SSN, although this is being worked on.

Another way identity theft can occur is when a person cashes a tax refund. The check-cashing place should ask for a form of identification that shows a person’s address, DOB & SSN. If the ID information is recorded, it can be used to commit identity fraud.  Unfortunately the unlawful use of ID information has been traced back to several check-cashing organizations.

If you happen to lose important documents (usually ID cards or bank information), this can also be used to commit identity fraud.

There are several credit monitoring agencies that will watch for identity theft (for a fee, of course) and several websites allow you to check your three credit scores once a year – I highly recommend using one or both of these services to self-monitor for identity theft.  If you find out you have problems, or even if you think your identity could be compromised, check out the IRS’ Taxpayer Guide to Identity Theft and the IRS’ Guide to Identity Protection.  Both are excellent sources of information.

Keep your identity protected and your life will be much easier – self-monitoring and diligence is a key to protecting yourself!

If you have any thoughts or questions, please don’t hesitate to contact me.  You can follow us on Facebook by clicking on the icon below my signature.


Tom Hodge, President

The Hodge Group