Preventing Tax Fraud Through Risk Control
4 min read
Tax return fraud is a huge crime in the United States. It usually happens when someone breaks the law and tries to claim deductions, credits, or payments that they did not receive. This type of criminal behavior goes down the line, from simple mail and paper fraud to more complicated schemes involving stolen identities, tax havens, and other ways to steal money from the government. A common scheme is for a person to claim deductions for things that they did not do, but the agency will give them a credit based on the amount of time and effort they spent working. Some criminals try to claim more deductions than they deserve, either out of fear or to get richer.
There are many ways to commit tax return fraud, from using your own name, your social security number, or your employer’s ID number to pretending to be someone else. Someone else may also try to use your ID number, social security number, or other identification number to file your tax return, or to get other types of benefits. Some identity theft criminals even try to use false information to file your tax return. For example, they may report your incorrect income tax deduction because they think they wrote in a fictional name, or they may report fake expenses. Identity theft can be very serious and expensive, but it doesn’t have to happen.
If you become a victim of tax return fraud, there are some things you should know. First, the most important piece of information you must have is the actual tax ID number of the victim. It should be issued in any manner prescribed by the IRS. Next, you should know exactly what tax identification number of the victim has. This includes both the social security number and the tax identification number. There is one thing you should know about victims of identity theft: if the perpetrator is using your social security number, he can get a tax ID in just a few minutes.
In order to save time for the identity theft perpetrator, the victim should shred all tax returns before throwing them away. Filing cabinets normally have a shredder that consumers can use to make this procedure easier. You should also change your passwords often and keep track of the numbers that you use to open files and other sensitive information. The IRS will not contact you if you provide them with the same information twice, so there is no reason for you to be negligent.
After you become a victim of tax return fraud, the next step is to notify the IRS immediately. The sooner you do this, the better. It is important for you to report any suspicious activity, including phishing emails, to the Identity Theft Division at the Department of Taxation. There is a r block, also called an “interim blocking device,” that you can put in place to block incoming emails from the identity theft hotline or the IRS.
When you become a victim of tax fraud, it is important to contact your financial institution, insurance provider, credit bureau, and the FBI. If you file a claim through the IRS, the thief may have used your tax returns as collateral. If you file electronically, the thief may have used a template to file multiple tax returns using your Social Security number. Once the thief has gathered enough tax returns, he or she will know how to file all of them in the name of someone else, leaving no trail that can be found.
Tax fraud occurs when someone pretends to be someone else in order to file a tax return. This includes issuing a driver’s license in the name of someone else, or using someone else’s Social Security number. This type of criminal activity can result in a lot of serious federal offenses, such as identity theft. The Internal Revenue Service (IRS) considers any instance where you have intentionally attempted to defraud the government and committed the federal crime of tax evasion to be tax fraud. A conviction of tax fraud can mean years in prison, hefty fines, and even loss of your freedom.
If you are concerned about refund fraud, it is important for you and your family members to do some risk control first. Make sure that you do not make any large purchases before tax season even starts, and that you are using only your social security card for making purchases, such as groceries or gas. You should also make it a point to shred all documents that you don’t absolutely need, and to report any suspicious activity to your bank or financial institution immediately. In addition, you should be alert for scams and hackers who might steal your personal information, such as your Social Security number. To prevent identity theft, it is important for you and your family members to do some serious online and off-line risk control to reduce the risks of fraudulent activity.
