Tax-Related Identity Theft on the Rise

The Government Accountability Office says cases of identity theft of taxpayers have increased 400% since 2008.  In testimony before a House subcommittee, the GAO said there were nearly 250,000 cases of tax-related identity theft in 2010, up from just over 50,000 in 2008.  It should be noted that in most cases, the IRS is not the cause of a person’s identity being stolen; their identity was stolen in some other way unrelated to theIRS or the tax filing process.  The problem is, many people discover the identity theft when they try to e-file their tax return and it gets rejected because someone else has already filed a return under their Social SecurityNumber.  And when that happens, the IRS is seemingly unprepared to help.  From an article on

(T)hree taxpayers who testified Thursday on what happened after their identities were taken all said they had serious issues with how the IRS dealt with their cases. 

Sharon Hawa of the Bronx, N.Y., said in her prepared testimony that she has now been victimized both in 2009 and 2011 — and that the IRS had seemed less equipped to deal with the problem the second time around.

“They continue to treat me as if I am the one to blame — adding even more stress to the situation,” Hawa said. “There is no clear process in place to prevent this from happening or to provide identity theft victims with the necessary steps they must take to receive their refunds and further protect their identity.”

Ms. Hawa and two other victims who testified on Thursday did receive personal apologies from IRS Commissioner Doug Shulman.