Filing your taxes well ahead of the deadline might be a mundane and
time-consuming task, but with the record number of security breaches in 2015,
the longer you wait, the greater your risk of Tax Identity Theft. This type of
theft is where someone uses your Social Security number to steal your tax
“IRS estimated it prevented $24.2 billion in fraudulent
identity theft (IDT) refunds in 2013, but paid $5.8 billion later determined to
U.S. Government Accountability Office
Tax Identity Theft is a huge risk, and one that all taxpayers need to be aware
and cautious of. Here’s a real life story of Tax Identity Theft from our Vice
President, Tracey Engelhardt, and her husband Kevin.
Prior to filing their 2013 taxes, Tracey and Kevin received a 2013 tax refund
check in the mail for $9,400 payable to Kevin and another women’s name. Since
Tracey and Kevin had not yet filed their 2013 taxes, they realized someone had
fraudulently filed in their names in order to obtain their refund money.
While they were able to quickly identify the fraudulent activity, they were not
able to file their 2013 taxes electronically, which caused a significant amount
of frustration and extra work on their part. They ended up being charged with a
penalty and interest because the Internal Revenue Service (IRS) wasn't able to
accept their payment…. PLUS they continue to have struggles with filing their
taxes now, two years later.
We sat down to ask them about their experiences first-hand. Here’s what Kevin
had to say:
What was the first thing you did when you found out?
We called the IRS to find out what had happened. I received a $9,400 refund
check in a stranger's name at my home address. It said it was for 2013
taxes, but we had not filed yet. I waited on hold for nearly 45 minutes to
talk with an IRS rep, who then transferred me to a fraud agent.
How did you feel?
I was frustrated that it took so long to be connected with an IRS agent. I
was shocked that something like this happened, using the Turbo Tax software,
which should have had security in place to avoid this. I was flabbergasted
that the refund came to my home, and it made me wonder… How was someone going
to get the money?
What were your concerns?
My concerns were around what else might have been stolen or violated. Would
I be able to file taxes in the future hassle-free (I'm not), and how would that
affect my filing my 2013 taxes? It was terrible. I couldn't file
electronically. They didn't accept my payment. I ended up with a
penalty and interest because the IRS wasn't able to accept my payment.
How did you fix it?
I filed my taxes the "old-fashioned way" which is a hassle because I have so
many partnerships, etc., to account for. In the end, I paid taxes, penalty
What do you wish you knew then that you know now?
I wish I knew it was a bigger risk than I thought it was. I didn't imagine
that someone would use my Social Security number to file a false "refund"
return. I'm not sure I would have done anything differently. I like
Turbo Tax, but I wish they had better firewalls and safeguards in place.
What advice would you give to others to prevent this?
Just know that it's a possibility. Know that it changes how you have to
file taxes in the future. Don't assume a huge company has the appropriate
security measures in place.
What advice would you give to others in this position?
It's a pain in the butt, but sooner or later, it gets worked out. Pay your
taxes by check because they couldn't match my payment to my return
What changes have you made due to this breach?
I'll do my taxes earlier this year. I'll have to use a PIN to file which
may change the timing and acceptance of my return. And even though I will
file early, I'll plan on receiving my refund much later than average person
will receive their refunds.
To learn more about Tax Identity Theft, visit the
Federal Trade Commission.
Click here to learn more about Tax Fraud from the Internal Revenue