Last night on 60 minutes Steve Kroft report on the rapid growth of an Identity Theft/Income Tax Refund Scam. Here is a link to the video of the report and the text of the report. I found it outrageous! The IRS has NO excuse for allowing this to happen. Now that 60 minutes has provided the world with a step-by-step instruction on how to perform the scam, I suspect rate of increase in the number of fraudulent income tax forms filed will increase far beyond the current projected rate. We need to do something to stop it right notw!
There are some simple things that the IRS and Congress can do to put the brakes on this fraud:
1. Do not allow a refund to be paid until the W-2 has been filed (and paid) by the employer.
2. If a refund is to be sent to an address that is different from the one used during the previous filing period, a change of address must be processed in advance, which will prompt a letter to be sent to the previous address for verification.
3. Prepaid debit cards receiving refunds must be registered with valid ID at the bank issuing the card
Longer term solutions:
1.The IRS should enlist the USPS to assist in spotting suspected criminals participating in this sort of scam. Yes, the USPS is a "private" business --but the Service and the Carriers could be offered some sort of reward for identifying criminals involved in this sort of activity..
2. Additional FBI resources need to be applied to arresting and convicting these criminals, and the Government should attempt to obtain restitution.
3. The IRS needs to make much larger investment in IT systems that will allow all of us to file electronically but have all the necessary check & balances to prevent all sorts of income tax fraud.
There are some simple things that the IRS and Congress can do to put the brakes on this fraud:
1. Do not allow a refund to be paid until the W-2 has been filed (and paid) by the employer.
2. If a refund is to be sent to an address that is different from the one used during the previous filing period, a change of address must be processed in advance, which will prompt a letter to be sent to the previous address for verification.
3. Prepaid debit cards receiving refunds must be registered with valid ID at the bank issuing the card
Longer term solutions:
1.The IRS should enlist the USPS to assist in spotting suspected criminals participating in this sort of scam. Yes, the USPS is a "private" business --but the Service and the Carriers could be offered some sort of reward for identifying criminals involved in this sort of activity..
2. Additional FBI resources need to be applied to arresting and convicting these criminals, and the Government should attempt to obtain restitution.
3. The IRS needs to make much larger investment in IT systems that will allow all of us to file electronically but have all the necessary check & balances to prevent all sorts of income tax fraud.
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