Mass identity theft prompts the IRS to take action

Cyber-thieves based in Russia and other countries recently hacked into an IRS website, stealing U.S. taxpayer information and using that information to file more than 10,000 false tax returns. In return, the hackers walked away with tens of millions of dollars in tax refunds.

Since then, the IRS has been working with federal agencies, state agencies and private companies such as H&R Block and Liberty Tax to agree upon new safeguards. The goal is to make such mass identity theft an impossibility.

According to USA Today, the new protective measures will begin in 2016. Among other things, these measures will mean that:

  • When someone files a tax return electronically, the IRS will make note of the IP address and capture other information in order to help identify the person as the legitimate filer of the return and not a hacker.
  • The federal government will collaborate with private tax-preparation companies and share information about potential tax fraud.
  • Private tax-preparation firms will agree to abide by the security standards set forth by the National Institute of Standards and Technology.

While this joint endeavor between public and private tax agencies is intended to reduce identity theft and the likelihood of fraud, it is certainly not foolproof. Refund fraud will undoubtedly still occur to some degree, and innocent taxpayers may still be unjustly charged with tax crimes from time to time.

For knowledgeable, up-to-date assistance with any tax crime concern, it is wise to consult a lawyer who is skilled in this particularly complex area of law.

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