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FBI
Stolen Identity
Refund Fraud
Each year, criminal actors target US persons and visa holders for
Stolen Identity Refund Fraud (SIRF). SIRF is defined as the fraudulent
acquisition and use of the Personally Identifiable Information (PII) of
US persons or visa holders to file tax returns. The fraudulent tax
returns are sent to bank accounts or pre-paid cards that are held under
their control. SIRF is relatively easy to commit and extremely
lucrative for criminal actors. While all U.S. taxpayers are susceptible
to SIRF, over the past year, criminal actors have targeted specific
portions of the population, including: temporary visa holders, the
homeless, prisoners, the deceased, low-income individuals, children,
senior citizens, and military personnel deployed overseas. This may be
due to the perception by criminal actors that these individuals are
less likely to be aware of or receive notification that their identity
has been stolen.
After criminal actors steal PII, they use corrupt tax preparation
companies or online tax software to file fraudulent tax returns with
the stolen identity information at the federal and state level. The
only legitimate information needed to file a fraudulent tax return is a
name and social security number. This information is obtained by
criminal actors through a variety of techniques, including computer
intrusions, the online purchase of stolen PII, the physical theft of
data from individuals or third parties, the impersonation of government
officials through both phishing and cold-calling techniques, the
exploitation of PII obtained through one's place of employment, the
theft of electronic medical records, and searching multiple publicly
available Web sites and social media. After the criminal actors
electronically file fraudulent tax returns, they use pre-paid debit
cards or bank accounts under their control to route fraudulent returns.
The balances on the pre-paid cards and bank accounts are depleted
shortly after the tax refund is issued.
Additionally, investigative information shows cyber criminals
compromised legitimate online tax software accounts during the 2015 tax
season. Cyber criminals modified victims' online tax software account
information, diverting tax refunds to bank accounts or pre-paid cards
under their control.
Many victims of SIRF do not know they have been targeted until they try
to file their legitimate tax return. Many also receive notifications in
the mail that their returns are being audited or are under review
before they have even filed their tax returns.
If you believe you are a victim of SIRF, contact your local FBI or IRS
field office. You may consult www.identitytheft.gov which can help you
report and recover from identity theft. Additional resources are
available at https://www.irs.gov/Individuals/Identity-Protection.
Tips to protect yourself:
File tax returns as early as possible.
Monitor your bank account statements regularly, as well and as your
credit report at least once a year for any fraudulent activity.
Report unauthorized transactions to your bank or credit card provider
as soon as possible.
Be cautious of telephone calls or e-mails that require you to provide
your personal information, especially your birth date or social
security number. If you are in doubt, do not provide the requested
information.
Do not open e-mail or attachments from unknown individuals.
Additionally, do not click on links embedded in e-mails from unknown
individuals.
Never provide personal information of any sort via e-mail. Be aware,
many e-mails requesting your personal information appear to be
legitimate.
If you use online tax services, ensure your bank account is accurately
listed before and after you file your tax return.
Ensure sensitive information is permanently removed from online tax
software accounts that are no longer being used. Allowing online
accounts to become dormant can be risky and make you more susceptible
to tax fraud schemes.
If you feel you are a victim, immediately contact the three major
credit bureaus to place a fraud alert on your credit records.
If you are a victim, file an Identity Theft Affidavit (IRS Form 14039).
This form is available for download from www.identitytheft.gov.
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