Identity Crime: Tax-Refund Fraud And Identity Crime

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Tax-refund fraud happens when a cyber criminal steals someone’s personal information to file a fake tax return and to claim that individual’s the refund. To file a tax return online, they only need a name, date of birth, and a Social Security Number.
Cyber criminals are constantly searching for Social Security Numbers and other personal information that they can leverage for fraudulent purposes. Because identify theft and tax-refund fraud often starts long before tax season, it’s important to protect your personal and financial information year round.
The possibility of Tax fraud also occurs when an individual or business entity willfully and intentionally falsifies information on a tax return in order to limit the amount of tax liability.
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Refund Fraud
Refund fraud occurs when people dishonestly claim refunds, rebates or offsets they aren't entitled to. This can happen in a range of ways, from claiming fictitious expenses, to creating false documentation to support a claim.
Some individuals lodge fraudulent claims in their own name or for their business; others lodge a claim on behalf of another person. Identity crime related to refund fraud is an increasing problem, with stolen identities used to lodge false income tax returns and activity statements with the aim of fraudulently getting refunds.
Refund fraud cheats the whole community and disadvantages those who do the right thing. We take it very seriously, and there have been a range of controls and systems in place to detect potential refund fraud, including:
• analytical models that use behavioral and statistical algorithms to analyze information on income tax returns, business activity statements and other tax forms
• sharing data and intelligence with our partner agencies
• Obtaining information about suspected fraud from the community and other government
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The Internal Revenue Service (IRS) does not initiate contact with taxpayers by email, text messages, or social media to request personal or financial information. If you receive an unsolicited email claiming to be from the IRS, do not click on any links or reply. Instead, forward it to and delete it from your inbox.
• Look out for phony messages or websites claiming to be from the IRS or tax preparation services. Exercise caution when opening suspicious email attachments and do not click on web links in unsolicited email messages. Scammers who try to access your personal or financial information may use the IRS name or logo in email messages and on fake websites to lure potential victims.
• Beware of promises of “free money” from inflated refunds. Scammers frequently pose as tax preparers during tax season. If you are contacted by someone who promises a large tax refund or a refund you are not expecting, do not give out any personal or financial information. If the offer seems too good to be true, it probably
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