General Interest

The IRS and Identity Theft

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He and my husband are great friends – going on 40 years! In addition to being a good friend, he’s also very bright, well-educated, and very (very) comfortable, financially-speaking. So we were surprised by his story. He owns two homes, a principal residence and a vacation home. When he files his federal taxes, he files them based on his principal residence in FL. So he was surprised when the IRS sent a notice to his vacation home in the Carolinas saying that he was being audited based on a 2009 federal return filed in the Carolinas. Again, that’s not where he files his federal taxes, so what was going on.

I’ll shorten the long, perplexing story. Our friend, our bright, well-educated, financially-comfortable friend was the victim of identity theft. The thieves, with his Social Security number in hand, “filed” a federal return claiming a significant refund. They got a refund, and our friend got a headache – a huge one.

According to USA Today (February 1, 2012, Money, 1B), the IRS stopped over 260,000 fraudulent returns in 2011 (up from approximately 50,000 fraudulent returns in 2010). This is a multi-billion dollar growing problem. And the problem is not just one for the Feds – it’s one for you and me, too. Identity theft is a nasty, horrible mess to have to deal with.

How do the thieves get your (or your parents’) Social Security numbers? You (or your parents) probably gave it to someone (a hospital, a bank, a school….) and a rogue employee “sold” it to the identity thieves. So, here are some suggestions for going forward.

-���� Invest in a shredder. You can get an excellent one for under $100.

-���� Don’t give your Social Security number to anyone – especially someone calling you over the phone or contacting you by email.

-���� If someone, like a hospital emergency room, wants your number, tell them they can have your state-issued driver’s license number or state-issue identity number.

-���� Shred any documents you have that contain your SSN. Don’t throw these documents into your trash. An exception might be copies of your Federal and state taxes going back for the past seven years. If your tax copies are older than that, and you’re disposing them, then SHRED them, first.

-���� Check the security of your parents’ identity or the identity of other aging loved ones in your life. You’ll remember that up until about 15 years ago, SSN’s were used on all kinds of documents with regularity. Our elderly may not be as “in tune” with the insidiousness of identity theft as their younger friends and family. So, educate them!

-���� Check your credit score. See if there are any accounts that have been opened that you don’t recognize.

Be careful out there.� It can get scary!

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