Identity theft is the type of crime that’s easy to dismiss. Until it happens to you.
Just imagine, you’ve filed your tax return and are eagerly awaiting your refund. It’s money you desperately need to pay some bills or buy whatever you’ve been hankering for.
But then you get a notice from the Internal Revenue Service saying that your return has been rejected. You won’t be getting a refund because it has already been claimed. You’ve become a victim of identity theft. Now identity theft becomes very real. And it’s getting frustratingly real for a growing number of taxpayers.
Typically, an identity thief will steal someone’s personal information, including his or her Social Security number, and file a bogus return claiming a refund. This is often done early in the tax season, before most people have a chance to file their legitimate returns.
From 2008 to 2012, the number of tax-related identity theft cases the service handled increased 666 percent, according to the latest report to Congress from National Taxpayer Advocate Nina Olson. During fiscal 2012, the service worked 55,000 identity theft cases, or 25 percent of its total case inventory, Olson said.
The IRS had nearly 650,000 active cases in its queue at the end of last year, Olson wrote. She was particularly perturbed that it takes the agency six months or more to resolve them and provide refunds or other relief to the victims.
Because it takes so long, “many victims are left exposed to identity theft-related problems the following filing season,” Olson said.
The IRS says the growth of identity theft cases has challenged the agency. From 2011 to 2012, it has doubled to 3,000 the number of employees working on them, according to Terry Lemons, an IRS spokesman.
“We know it’s frustrating to folks, but it’s frustrating to us, too,” he said.
The IRS has created a special identification number to authenticate that a return belongs to a legitimate taxpayer. For filing season 2012, the agency issued an Identity Protection Personal Identification Number to about 250,000 taxpayers. For this year’s filing season, the program is expanding the program to more than 600,000 taxpayers.
The agency has created on its website (www.irs.gov) a section devoted to identity theft. There is also a dedicated telephone line. You can reach the IRS Identity Protection Specialized Unit at (800) 908-4490.
Still, Olson was critical of the bureaucracy of the specialized units within the IRS set up to handle identity theft. People need a single point of contact, she recommended. The agency should assign a “traffic cop” to monitor the cases.
If your return is rejected, contact the IRS immediately.