Editorial: Refund fraud shows need to protect SS numbers
With almost every technological innovation, there is an unforeseen consequence.
This time of year, many residents appreciate the ease of filing tax returns electronically. But criminals also are using that service and stolen identities to file bogus tax forms and collect refunds.
Last year, the Internal Revenue Service paid out about $4 billion in these fraudulent tax refunds. Attorney General Eric Holder reported this week that 880 people were charged with the crime over the past year. But he said the scope of these fraud schemes continues to grow, and the problem has been hard to stop.
It is hard to understand how the IRS could make that many mistakes, but apparently the thieves use the electronic filing to mass-produce fraudulent returns and send them in before the legitimate taxpayer.
“You know, you file a thousand fraudulent returns and then you see which ones go through,” IRS Commissioner John Koskinen said this week. “They can adjust faster than we can adjust.”
One Toledo, Ohio, family learned that the hard way when their 19-year-old daughter’s tax return was rejected just hours after it was filed. A thief had already sent in a return using the teen’s information.
“This is the first time in her life she has ever filed income taxes, after earning all of $1,800 stocking products on grocery store shelves,” her mother Laura Hankin told The Associated Press. “I did her taxes for her online, but immediately she got the rejection.”
Claire Hankins should eventually get her refund, but it will take an extra six months, the family has been told.
The IRS is strengthening its systems, but the agency warns citizens to protect their personal information, especially Social Security numbers.
We have heard that before in other identity theft scams, but it is easier said than done.
Thieves often gather Social Security numbers using telephone scams and others schemes, and people need to be alert to that. But the larger problem may be that our personal identity information is simply in too many hands, making it even more vulnerable to hackers and thieves. For example, in one of these cases, a middle school food service worker apparently stole students’ personal information from an electronic database.
Certainly using Social Security numbers as an “identifier” is convenient for schools, government agencies and businesses, but is it really necessary? And if it is necessary, are these data bases well protected?
It is time to look at placing new limits on what entities are allowed to gather and store our personal information.
The Herald-Dispatch welcomes your comments on this article, but please be civil. Avoid profanity, obscenity, personal attacks, accusations of criminal activity, name-calling or insults to the other posters. Herald-dispatch.com does not control or monitor comments as they are posted, but if you find a comment offensive or uncivil, hover your mouse over the comment and click the X that appears in the upper right of the comment. If you do not want your comment to post to your personal Facebook page, uncheck the box below the comment.