Kim Komando features some protective advice in this security alert. Users should also not respond to any unexpected calls from IRS, as this US Mail still remains the primary means of communication (and they do not contain by email or phone initially)
In its most basic form, a crook uses your Social Security number to file a bogus tax return in your name, claiming some huge refund. According to the plan, the IRS sends out the refund to the fraudster who gets away scot-free. Or at least that’s the plan. Last summer, a Florida man was sentenced to 10 years in prison for stealing identities and then filing false returns claiming over $13 million in false refunds.
Unfortunately, convictions like this are the exception rather than the rule. Last year, the IRS actually paid out $5.8 billion in refunds that it later realized were actually fraudulent. But those were only the ones it caught. The IRS may never know just how many dollars in fraudulent refunds it has paid and gone undetected. You and other taxpayer victims may not know you’ve been hit until your legitimate return is rejected by the IRS because a crook has already filed using your information.
That’s why I’ve recommended the first step to protecting your tax return is to file as soon as possible. This reduces the window of time a thief has to file on your account. But I understand that’s not always practical for everyone. Perhaps you have a complex tax situation or you are still waiting on paperwork from others. Some people delay filing because they actually owe the government additional tax payments, and they want wait until the last minute to pay up. However, it is perfectly fine to file your return early and still hold off making your payment until the April 15 deadline.