Recent cases of massive identity theft have prompted the Internal Revenue Service to create a Cybercrime Unit to investigate the growing trend of identity theft.  Hackers obtain information by hacking into websites to retrieve names, social security numbers and income data and then filing false returns for refunds.  These data breaches come from various business entities including payroll companies, department stores and medical facilities.

In 2015, there were at least 270 of these data breaches in which the thieves have gained access to over 100 million records.  One of the larger breaches happened in February 2015 to a health insurer in which the data of over 80 million records were stolen.  Three years before, the IRS was just using 3% of its time working on identity theft but that’s now up to 18% nationally, and as high as 50% in some metro areas such as Tampa and Miami.

Just as the tax prep season got underway in 2015, 18 states reported tens of thousands of fraudulent returns filed through Turbo Tax.  While the company did not have a data breach, the thieves took stolen taxpayer information and filed false returns in which the refunds went to prepaid, untraceable debit cards.  Taxpayers became aware of the fraud when they tried to file returns and were told their refunds were already sent.  

If You Were a Victim of Identity Theft

If you think you have been the victim of tax-related fraud, there are steps you should take to further protect yourself. Contact the Sodowsky Law Firm at 703.968.8000 for additional information.