When you think of tax fraud, images of inflated personal
deductions, skipped payroll tax, or unreported offshore investments come to
mind. The extreme tax evaders make
headlines this time of year (think Wesley Snipes) and provide a little
entertainment while we collect W-9s and sweat out late-night Turbo Tax
sessions.
According to the US government, wage and tax fraud being committed is rising at an alarming rate, and the criminals
are getting smarter. Instead of filing false information on their personal tax
returns, theyll steal your identity and file a false return in your name. By the time everyone figures out whats
happened, a lovely (and fraudulent) check has been sent to the fraudster,
courtesy of the US Taxpayer. The
AP recently reported, twenty four percent of the 279,000 identity
theft complaints last year came from people concerned their Social Security
numbers had been stolen and used to fraudulently file for tax refunds or apply
for jobs. Thats an 8% rise from
the year before.
The identity theft epidemic is evolving and now hitting the
IRS. I have yet to see an
explanation of what happens to the victims. Are they on the hook to repay for the fraudulent
returns? The IRS isnt always
sympathetic. Its becoming
increasingly important for individuals keep their personal data secure and
monitor credit bureaus routinely.
Its even more important for the merchants and processors to ensure
their clients safety by deploying fraud prevention tools, like knowledge
based authentication to help ensure their clients information stays
safe.
[Contributed by Jeff Davis, President & CEO]
