Rip off Alert: Staying Safe from Identity Theft

The problem of identity theft has grown so enormous that billions of taxpayers have become victims of identity theft over the years. In 2011 alone, the IRS paid $5 billion in fraudulently claimed tax refunds. The future is looking worse. According to an estimate, more than $20 billion could reach the pockets of tax thieves in the form of tax refunds in the next five years. That spells trouble for taxpayers and the government.

What you can do

If you become a victim of identity theft, and your identity is used for claiming refunds, you will come to know of it only when the IRS sends a letter your way informing you that you have already filed your tax return.

With identity theft reaching the top spot on the IRS Dirty Dozen Tax Scams for 2012, you might wonder:

What is the IRS doing?

 The IRS is furnishing stats to show you that they are trying to fix the problem.

But this is not enough, it seems, because the country is losing billions of dollars every year to fraudulent refunds despite the monitoring and audits of the IRS. More than a million cases of identity theft remain undetected each year.

While waiting for the IRS to beat the scammers, help yourself. Make it a habit to think twice before sharing your personal and financial information with strangers.

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