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The IRS has announced that it is cracking down on suspected identity thieves. In January of 2013 there were 734 enforcement actions. During the past fiscal year, there have been 109 arrests and 189 indictments.

As reported previously in this blog, identity theft for obtaining tax refunds is a rapidly growing problem. After identity thieves have obtained an individual's Social Security number, they attempt to file for a refund before the victim completes his or her IRS Form 1040. The identity thief benefits through assuming the identity of a lawful taxpayer.

Stephen Miller, acting Commissioner of the IRS, stated, "As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft. We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area."

In fiscal year 2011, 80 individuals were sentenced for identity theft. That number increased to 223 in fiscal year 2012. The IRS credits many of the successful prosecutions to changes in their software. The software now flags multiple refunds to one person or to one address.

The www.irs.gov website includes information on taxpayer protection. You can go to that website and search "identity theft." Taxpayers should follow specific recommendations to protect themselves against identity theft:

1. IRS eMail – Do not open unexpected emails that claim to be from the IRS. Forward them to phishing@irs.gov. The IRS does not ask for taxpayer information by email.

2. Be Alert – Protect your wallet or purse. Don't give personal information to a stranger on the phone or through the internet.

3. Stolen Social Security Number – If it appears that someone is using your Social Security number to obtain employment and you see their income reported on your tax information, report it to the IRS.

4. Protect Your Social Security Number – Do not carry documents in your wallet or purse that contain your Social Security number.

5. Potential Theft – If you believe your identity has been stolen, file IRS Form 14039, Identity Theft Affidavit. You may also contact the IRS Identity Protection Specialized Unit at (800)908-4490.

6. Computer Tax Software – If you prepare your tax return with software, use a strong password. A strong password has 10 to 12 (or more) characters with a combination of text and numbers. You may also wish to save your tax records on a flash drive, rather than on your computer's hard drive. Keep the flash drive with your other personal records and then delete your tax return data from your computer's hard drive.

- Heinz J. Brisske


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