Tax time...What's changed and how likely we are to become victims of tax filing fraud
Bottom Line: Here we are at tax time 2018. If you have all of your information together the official opening of the season is next Monday, the 29th. In recent years many have been in a bit of a race to file. Not necessarily to receive a refund but to beat would be tax filing fraudsters to it. The idea being that once you've filed the IRS won't accept another return so no fraudulent attempt against you would be successful. While that's still your best bet to ensure you aren't victimized there are inklings of good news...
The IRS really has become more effective over the past two years at combating tax filing fraud. The bad news the single biggest catalyst for potential tax filing fraud, ever happened last fall. First let's take a look at what's changed:
Number of confirmed fraudulent tax filings:
- 2014: 1.8 million
- 2015: 1.2 million
- 2016: 787,000
So that's meaningful progress as the IRS has ramped up the effort to improve its technology, identify and bust fraudulent rings and implementation of systems like the IP PIN system for victims of ID theft. That's the good. Now for the bad. The Equifax hack last year was the worst ID theft event in American history with about half of all Americans having enough information stolen to potentially have tax filing fraud successfully attempted against them. While we wait and hope that we don't see record setting and rampant fraud - until the season gets going we won't really know. As a result, even if you owe - it probably still makes the most sense to file as early as you're able. It's far better than the worst-case outcomes.