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May 11, 2012

Death and taxes - identity thieves put both to work with latest scam

They* say that the only certainties in life are death and taxes.  Identity thieves are now taking advantage of both in a new scam.  Thanks in part to the publication of the "Death Master File" (sounds like something from a Hitchcock movie) that lists the Social Security number and other information about the deceased, identity thieves are being able to file tax returns in the names of dead people or use deceased persons as dependents, thereby increasing their tax refunds.

According to the IRS, tax related identity theft has victimized nearly 500,000 tax payers since 2008.  The IRS has already flagged another 91,000 suspicious returns for investigation this year.

Another problem is that the IRS won't tell victims of this or other tax related identity theft who the suspected perpetrator is.  This protects the privacy of the criminal but also makes it harder for the victim to defend himself from other forms of identity theft committed by the criminal.

I have had many calls about tax refund identity theft over the past two years.  The problem is there really isn't anyone to sue (unlike when accounts are fraudulently opened, you can sue the company that negligently opened the fraud account or the credit bureau that continued to report the fraud account after being alerted to its fraudulent nature).  So its hard for me to do anything with these cases other than give the victim some advice, primarily do whatever the IRS says so they can get it straightened out.   And that's the same advice I give to all of you, that and be vigilant and diligent in your fight if your identity is ever stolen.

*  As my wife always says, who is this "they" you speak of?

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