Tax return scammers are taking a big hit

Tax return scammers are taking a big hit

There’s a lot to dislike about taxes, but the Internal Revenue Service has quietly given taxpayers one thing to appreciate: Less of us are seeing our tax refunds get hijacked through identity-theft scams.

Credit for this goes to the IRS, as well as state tax agencies, tax-preparation services and financial institutions, all of whom have had to cooperate to stop thieves from filing fake returns for real people that yield refunds they redirect to themselves. The progress has been impressive, but there’s still a lot more to be done.

Finally, some progress

According to the IRS, taxpayer identity-theft reports plunged from 677,000 in 2015 to 401,000 in 2016 down to 242,000 in 2017. To put that in context, the IRS received 135.7 million tax returns in 2017.

Further, the IRS had pared down the backlog of identity-theft cases to about 34,000 at the start of fiscal year 2017, versus 372,000 at the start of the 2013 fiscal year.

A January 2018 report from the Government Accountability Office noted that in 2016, the IRS blocked at least $10.56 billion of a minimum of $12.24 billion in identity-theft tax-return fraud. But it did pay out $1.68 billion. And while that’s a painful number, it’s also just 0.11% of the $1.46 trillion in income taxes paid in 2016.

The IRS also thanked banks for helping to recover $281 million in fraudulent returns in 2016. The agency even provided many more taxpayers with six-digit personal identification numbers that authenticate their returns — about 3.5 million for this filing season.</sp

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