Identity theft is a huge problem in this country. According to the FTC, as many as 9 million Americans have their identities stolen each year. So who can we trust to protect us? Unfortunately, not the IRS.
Stories of hackers breaking into business computer systems to steal credit card information and Internet phishing schemes are nothing new. This week I read of a fake ATM machine installed in Las Vegas adjacent to a computer hacker convention – and yes some of the hackers were themselves victimized. Now we can add the IRS to the list of places where our personal data is not safe.
A recent report by the U.S. Government Accountability Office (GAO) says IRS efforts to stop identity theft are woefully inadequate. Last year the Service found over 50,000 incidents of identity theft but admits it does not know how many went undetected. The Service also acknowledged it didn’t begin any major effort to detect and thwart identity theft until last year. A day late and a dollar short? The GAO thinks the Service is years late and tens of millions of dollars short.
Although tax fraud and forgery has always been illegal, Congress passed the Identity Theft and Assumption Deterrence Act in 1998. And the FTC has publicly acknowledged problems with ID theft at the IRS since at least 2004. Why then is the IRS still having such problems? Good question.
The IRS told the GAO that is is considering increasing its identity theft prevention measures for the upcoming filing season but admits it doesn’t have an effective way of measuring how well those procedures are working. And the very privacy laws that supposedly were passed to protect our financial records from disclosure make coordinating with police difficult. In some cases, the IRS balks at working with the victims; instead releasing refunds to the fraudster!
Sound incredible? The GAO found instances of the release of refunds to fraudsters even after the legitimate taxpayer notified the IRS of the identity theft.
Will the government get the problem fixed? Probably yes. But don’t count on it by the upcoming filing season which begins in just 2 months.
Identity theft is a multibillion dollar problem in the United States. Victims can spend months or years and thousands of dollars cleaning up the mess the thieves have made of a good name and credit record. In the meantime, victims of identity theft may lose job opportunities, be refused loans for education, housing, or cars, and even get arrested for crimes they didn’t commit. Humiliation, anger, and frustration are among the feelings victims experience as they navigate the process of rescuing their identity. Suing the thief, if he or she is even caught, is a possibility but chances are that they have no money. So what can you do?
If the theft of your identity occurs because of the negligence of a third party, there may be plenty that you can do. Banks, utility companies, stores and others who collect and process your credit data have a responsibility to protect and safekeep your information. If they fail to do so, you may be able to recover against them even though they are not the ones who stole or profited from your identity. And if the bank takes too long to fix the problem once they have been notified by you, they may be liable as well.
If you lost your business were denied a loan because of a third party’s negligence in handling your confidential data, call MahanyLaw. We know how to pursue third parties for your losses and aggravation.
We consider cases nationwide. Attorney Brian Mahany and his team of investigators, forensic accountants and lawyers have helped recover billions of dollars for victims of fraud.
Call us at 414-704-6731 or contact us through our website. You can also visit our fraud recovery page. Most services are billed on an hourly basis and our minimum loss amount is $5 million. Sometimes we will consider hybrid fee arrangements.
[Highlights of the GAO report are available here.]