On May 26th, the IRS announced that more than 100,000 people have now become victims of “a new, sophisticated identity theft scheme.” The thieves used the IRS’s online application, “Get Transcript” to access the victims’ information. According to IRS Commissioner Koskinen, the criminals attempted to access tax transcripts of “approximately 200,000 taxpayers,” and had an over 50% success rate. The IRS has since disabled the application, and is aggressively warning the affected taxpayers.
The application in question allows taxpayers to obtain line-by-line return information going back five or more years. Thieves with access to this information could use it to file false, yet more legitimate looking tax returns. The more legitimate the information on the false return, the more likely the return is to clear the IRS’s security filters, which flag suspicious returns by looking for anomalies in the tax information.
Over 100,000 is quite a ghastly number, but the damage is not as bad as it seems. According to Koskinen, there were “a total of 23-million successful downloads through the Get Transcript application” during the 2015 filing season. The 104,000 fraudulent downloads represents a small fraction of total downloads, Koskinen stated. He also estimated that of the 104,000 fraudulent downloads, only about 15,000 may actually result in false tax return filings and less than $50 million paid out it fraudulent refunds.
The IRS’s main priority now is contacting the 200,000 taxpayers affected and informing them of this crime.
The moral of the story is: be careful where and with whom you share your information. Identity theft is one of America’s leading crimes right now, with over 15 million identities stolen every year. Identity theft can be extremely difficult to recover from, so be vigilant.
*This piece was adapted from Jennifer Cordaro & Jeff Carlson of Wolters Kluwer News Staff.