IRS Tax Phone Scam and ID Theft Continues Nationwide, but There is Hope.

IRS Tax Phone Scam and ID Theft Continues Nationwide, but There is Hope. The IRS phone scam and identity fraud scheme seems to be picking up steam, but several new developments and law enforcement triumphs may be putting a damper on things. The Obama administration has asked for $242 million in new IT upgrades and safeguards at the IRS that would help stop those that are using identity theft and the IRS' own tools to steal from taxpayers.

In the fiscal year budget updated August 7, 2015, the IRS would receive a 72% increase from 2015. The President's budget "would bolster cyber security by improving detection and prevention of online data attacks through investments in advanced technology, information technology infrastructure and data analytics. Appropriately funding the IRS is a critical component of the Administration's overall cyber security strategy."

According to the Government Accountability Office, the IRS was fleeced of $5.8 billion as a result of tax refund fraud in 2014. Although law enforcement is making a big dent in both arrests and convictions for identity theft and tax refund fraud, added safeguards are needed to help protect taxpayers nationwide. Tax refund fraud hotspots include South Florida, where Miami alone had 316 complaints per 100,000 residents.

The U.S. Attorney's Office and the IRS have also attacked this problem at its root by revoking so-called "electronic filing identification numbers" or EFIN numbers, which allow individuals to file tax returns on behalf of others. Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation, stated, "stolen identity refund fraud is an ongoing battle that requires constant, joint and aggressive law enforcement actions to continue protecting the citizens."

In the meantime, taxpayers can protect themselves from identity fraud and the IRS phone scam by being very aware of the information they provide over the phone. The IRS will not call you directly to demand payment by credit card. They exclusively send written correspondence, and the audit process can take some time. So, don't be fooled. The IRS has published an IRS tax scam overview video to help taxpayers protect themselves from fraudsters.

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