March 28, 2011 - As if you've needed another reason to dread tax season. You've probably never thought that using the IRS would be a good way to steal your identity. But identity thieves tend to see things differently. Taxpayer identity theft is now a growing industry, and may have your name written all over it. And, if that isn't enough to make your day then just consider that if you become a victim of this crime, it is likely to result in an IRS audit of your tax return as an added bonus. 

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Taxpayer ID theft occurs more often than you might think, and it is a very simple crime for ID thieves to commit. In short, the thief simply needs access to your name and Social Security Number. With that bit of information, he can file a tax return in your name and collect a refund check.

The most industrious ID thieves will create W-2s that show a lot of withholding. They will also use tax laws to take advantage of write-offs, deductions and credits that you may not be eligible for. They will then file these fake tax returns, using your name and identity, but using someone else's address. When the refund check shows up, they cash it and move.

If you become a victim of this crime, you are not likely to find out until you actually file your taxes. Once that happens, the IRS will realize that two tax returns have been filed using your name and SSN. This usually triggers a tax audit and, if you were counting on a refund, it will slow that down until the audit is complete.

ID thieves who commit this crime will normally file early; prior to the time that you would normally file your taxes. Taxpayers who file late - with an extension, you can file as late as mid October - are the most at risk.

Unfortunately, you can't use a credit freeze or a fraud alert to protect yourself from this crime. In fact, the only real protection is to make sure that you're diligently shred any documents you are going to throw out that also have personally identifiable information on them. This includes any junk mail you receive with you name on it. What you view as trash, ID thieves view as treasure. And the trash barrel in front of your house is where they may dig for it.

You should also be very careful about whom you share personally identifiable information with; online, over the phone or even in person. The more people that have access to your information, the greater the risk you face. Even if the people you share your information with are all honorable, that doesn’t mean that they won't lose your information or expose it to people wouldn't mind taking you to the cleaners.

byJim Malmberg

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