IRS fraud and identity theft complaints down

Good news. When it relates to identity theft on tax returns, the IRS is reporting their numbers have dropped significantly at a time when many in the private sector continue to struggle with this issue.

Between 2015 and 2018, the IRS reported the following:

• The number of taxpayers who reported to the IRS that they were victims of identity theft fell 71 percent. In 2018, the IRS received 199,000 identity theft affidavits from taxpayers compared to 677,000 in 2015. This was the third consecutive year this number declined.

• The number of confirmed identity theft returns stopped by the IRS declined by 54 percent, falling from 1.4 million in 2015 to 649,000 in 2018.

• The number of suspicious refunds recovered has declined by 66 percent. In 2018, financial institutions recovered 84,000 federal refunds totaling $112 million for the IRS. By comparison, institutions recovered 249,000 refunds totaling $852 million in 2015.

Even with all this progress, the IRS is continuing its efforts against tax-related identity theft and is concerned that identity thieves continue to become more sophisticated, continuing to look for new ways of obtaining taxpayer data so they can more easily file false tax returns and claim fraudulent refunds.

These criminals have the resources, the technology and the tax skills to carry on this fight. And the IRS continues to be concerned that identity thieves are targeting tax professionals, businesses, human resources departments and other places because they have large amounts of sensitive financial information.

The IRS has a comprehensive and aggressive identity theft strategy to assist taxpayers, protect revenue, and prevent refund fraud. It continues to seek opportunities to realize efficiencies and improve the taxpayer experience.

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