Most know it’s important to take proper care of tax documents to prevent identity theft. You need to install firewalls and security software to prevent hackers from getting your tax information digitally, and shred credit card statements 45 days after they’ve been received. But what’s most unsettling is that even if we do take all these measures to protect ourselves against fraud, the Internal Revenue Service does not notify tax payers that someone stole their identities.
Earlier this week, the Treasury Inspector General for Tax Administration (TIGTA) released a press release explaining that the IRS hasn’t notified approximately 1 million of victims of employment-related identity theft.
According to their press release, this specific type of fraud happens when a person uses a stolen Social Security number when seeking employment.
The TIGTA states that a person may first realize that they have become a victim when they receive a notice from the IRS about a disparity on their tax returns. The IRS uses an automatic system to locate these discrepancies, but they have no procedures in place to actually notify the victims and sometimes these letters do not get sent out.
Between February 2011 to December 2015, the IRS found about 1.1 million victims of employment-related identity theft, and the organization began a program to notify victims. However, the plan was canceled without reason.
Additionally, the IRS has not developed a system to alert the Social Security Administration of fraudulent cases. Shockingly, TIGTA found that the SSA has no records of receiving an IRS notice for a whopping 21% of identity theft cases in 2013.
All in all, the TIGTA projected that the IRS failed to notify the SSA of incorrect wages in 397 cases.
So, what happens now? The TIGTA gave four recommendations to the IRA to fix their shortcomings. First, they recommend that the IRS develop processes and procedures to notify all those whose identities were stolen before January 2017.
The second recommendation was implementing a tracking process to ensure that the forms required to notify the SSA of wages that have been fraudulently reported are completed as soon as a discrepancy is found.
The third was to notify the SS of the specific identity theft cases discovered by the TIGTA in its review, which was completed on July 20, 2016.
The fourth recommendation was withheld from the official statement.