The IRS Cracks Down on Tax Return Identity Theft
Thursday, February 23, 2017

The IRS Cracks Down on Tax Return Identity Theft

It is one of the fastest growing crimes in Fort Lauderdale. Identity theft has destroyed the lives of thousands of people throughout South Florida. When most people think of identity theft, they immediately think of stolen credit cards, or crooks hacking into their email. But perhaps the most devastating form of identity theft is through the access of a person’s tax return. Although there is no full-proof tax filing software to prevent identity theft, the IRS is now is placing greater emphasis to stop thieves in their tracks. The results are already encouraging.

According to a February 7 audit report conducted by the Treasury Inspector General for Tax Administration (TIGTA), there have been significant reductions in the amount of undetected fraudulent tax returns. Just last year in 2016, the IRS released data that indicated a 50 percent drop in a number of fraudulent tax returns made into the agency’s system. The stricter measures helped save more than $4 billion.

W-2 Form Verification Code Initiative

One of the most effective programs used by the IRS is the W-2 Form Verification Code Initiative. The program takes an unconventional approach to preventing identity theft. Instead of analyzing each tax return, the IRS carefully examines the data related to the return. The IRS has also partnered with the Department of Justice to analyze the metadata.

According to the IRS, the largest group of fraudulent returns is due to the false reporting of wages and withholding. The TIGTA report indicates bad returns cost the government nearly $1.3 billion per year. By closely examining metadata, the IRS is able to identify more potential risk factors. Starting in 2017, the agency will open the brand new Identity Theft Tax Refund Fraud Information Sharing and Analysis Center. Its purpose is to reduce identity theft caused by the flow of bad tax refunds issued by the IRS.  Although there is no specific data to indicate a fraudulent return, the IRS and states have now developed algorithms to determine cases of fraud.

The Sophistication of Identity Thieves

Identity theft is also one of the most difficult crimes to solve. Thieves often use highly sophisticated technology that can go undetected by several types of computer software. They are also using new techniques. One of the popular trends for identity thieves is to target federal refunds, mainly because they typically are worth money. More thieves are now targeting state tax returns. Fortunately for Fort Lauderdale residents, there is no state income tax in Florida.

A Fort Lauderdale Tax Lawyer Can Help

Identity theft can happen to anyone. Even the most shrewd and carefully person can fall victim. Once someone accesses your personal information, it can bring lifetime damage to your finances. It can be a powerless feeling. To find effective solutions, it is important to seek representation from a Fort Lauderdale tax lawyer with a track record of protecting the rights of clients and looking after their best interests. Attorneys Ira L. Zuckerman bring more than 30 years of combined experience in helping the client resolve their tax problems. As skilled negotiators, they can help deal with the IRS on the behalf of each client. To learn more, contact the law offices of Zuckerman Law, LLC and schedule a consultation to discuss your case.

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Ft. Lauderdale, Florida 33394