Tax Return Fraud Puts Consumers, Businesses at Risk
Identity thieves continue to focus on perceived easy money in tax identity fraud, requiring better security measures, says anti-fraud firm ThreatMetrix.April 15 marks the deadline for tax season, but consumers and businesses should file their taxes as early as possible and pay more attention to their online tax accounts, as fraudsters are increasingly focused on tax identity theft, anti-fraud firm ThreatMetrix warned on March 10. As criminals gain more information on potential victims, filing for a tax refund in the name of another person has become easier. At least 10 percent of account access attempts, including account creation and logins, were fraudulent in the last month, according to ThreatMetrix, which seeks to detect fraudulent access to important online services, such as bank accounts and tax filings. "We've seen a large increase in attempts at identity theft, including tax fraud and account takeover," Mustafa Rassiwala, senior director of product management of ThreatMetrix, told eWEEK. "We see it typically with banks, and now with tax filings as well." The company's data, which includes data on fraudulent access attempts for one of the largest tax software makers, shows a growing problem, which matches data from the U.S. Treasury Department. In 2013, identify fraud affected 1.6 million taxpayers, up from 1.2 million in 2012, according to the Treasury Inspector General for Tax Administration.
While the Internal Revenue Service (IRS) is getting better at preventing damages—losing about $4 billion in fraud in 2011, compared with $5.6 billion in 2010—the agency still has a long way to go. The Inspector General's investigation in a sampling of 100 identity theft cases found that, while the correct taxpayer identity was eventually found in all cases, there was an average of 277 days of inactivity per case.