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Identity Theft: Fraudulent Tax Returns and Methods

Close to fifteen million Tax returns were red flagged as being suspicious by the IRS between 2011 and 2013. The scrutinized returns in total stopped more than fifty billion dollars in falsified claims from being paid out. In 2012 alone, an overall total of $4 billion of fraudulent tax returns were dispensed to persons who were found to have stolen identities. The dollar amount lost in that year was marginally greater than the $3.6 Billion in returns dispensed the previous year.  

Methods of identity theft have changed over the years and have become much simpler since the advent of the Internet.

Employees of many government agencies that requests a driver’s license or social security number have been suspect of being perpetrators, and workers in hospitals as well as doctor’s offices previously headed the suspect pool. Use of the Internet by many has made it simpler for identity thieves to thrive due to information being provided to vendors without any in-person verification of an individual’s identity. An offender only needs a sequence of accurate information to initiate a transgression. Additionally, computer savvy identity pirates have the ability to hack into online databases in their efforts to steal personal data. Recently, there has been a spike in online database break-ins such as a breach of Neiman Marcus’ database that had gone undetected for over six months affecting over one million of its customer’s credit card information. And the largest attack reported thus far was of Target stores online database where up to 110 million customers personal information was compromised including card information with matching PIN numbers.

Social media databases have also become a prime target for hackers with the popular LivingSocial Website hit with a breach that gave away the personal information of fifty million users. And Facebook has admitted that "a sophisticated attack" occurred this month but "no user data was compromised.” Facebook brags of having over one half billion users. The two largest search engines, Google and Yahoo have also stated that hackers have attacked their databases and some user names and passwords were stolen.

With the amount of information just sitting in cyberspace these hacker attacks are sure to continue and rise in regularity. Security measures and firewalls can only inhibit these attacks but overall, for every better lock built, a better thief discovers how to crack it.

However, old fashioned approaches such as searching through outdoor garbage cans for documents, including discarded credit card receipts, as well as spying on an individual during a financial transaction at a bank’s ATM still prevail. Snooping on those individuals who automatically pay by credit card at a gas station is another method of gathering our data for illicit purposes.

Or any place at all where the filling in of an extended form or application might provide a thief enough information to motivate a theft of identity.