JEFFERSON CITY, Mo. — Attorney General Chris Koster is warning Missouri consumers of a widespread tax return fraud. Since January, the Attorney General’s office has received at least 388 consumer complaints, and according to the Internal Revenue Service, this type of fraud could result in $21 billion dollars of consumer loss nationwide.
According to Koster, the fraud occurs when an identity thief uses a taxpayer’s stolen identity to file a fraudulent return and claim the identity theft victim’s tax refund. The identity thief will use a stolen Social Security number to file a forged tax return early in the filing season before the victim does; receiving the victim’s refund before the IRS processes the real filing.
With paperless e-filing, the scam is easier to pull off than ever before. Thieves invent phony wages or other income, submit the information electronically, and receive the fraudulent refund via mail or direct deposit within a month. While the IRS maintains records of earned wages and other types of taxable income reported by taxpayers’ employers and other organizations, the IRS doesn’t match these records to information submitted electronically by identity thieves until after it issues the refund. By the time the fraud is realized, the thief has cashed the refund check.
Signs consumers have become a victim of a fraudulent IRS filing include:
- More than one tax return was filed.
- Consumers have a balance due, refund offset or have had collection actions taken against them for a year they did not file a tax return.
- IRS records indicate they received more wages than actually earned.
- State or federal benefits were reduced or cancelled because the agency received information reporting an income change.
Koster recommends that Missouri consumers that have become a victim of this fraud should report it to the Internal Revenue Service at 800-908-4490. Consumers will need to complete the form 14039 and return it to the IRS. Missourians should also report the fraud to the Missouri Department of Revenue at 573-751-3505 or by email to firstname.lastname@example.org.
The Missouri Attorney General’s Consumer Protection Hotline is available to assist consumers in reporting identity theft. Missourians can reach the hotline at 800-392-8222 or file a report online. Tips for protecting against identity theft are available online.