Identity theft is a growing problem.  The IRS has recently released a publication on steps needed to be taken to prevent becoming a victim of identity theft and steps to take after becoming a victim.

In our practice we have had several instances where people have come to us with severe tax issues because of stolen social security numbers.  Stolen social security numbers are mainly used by people working in this country without proper work authorization issued by the bureau of immigration and customs.  ID Theft Claims Lead to Largest Raid in Iowa History.  These stolen identities have been used not only to procure work, but to get credit cards, home loans and other consumer financing.  The problem has become excessively pervasive because of the economic downturn, those under the table workers have lost their jobs and subsequently returned to their home country and defaulted on their loans, including taxes.

Identity theft was first coined as a phrase in the early 1960’s.  It is where someone uses your personal identification without your permission in order to commit fraud.  Whether it be a fraud on an unsuspecting employer or creditor the results are most devastating for the consumer.  There is the potential for loss of creditworthiness at a minimum to the loss of health and personal assets due.

Identity theft is a serious crime. People whose identities have been stolen can spend months or years, and their hard earned money, cleaning up the mess thieves have made of their good name and credit record. In the meantime, victims may lose job opportunities, refused loans, education, housing or cars, or even get arrested for crimes they didn’t commit.

The most common issues we see resulting from identity theft is tax fraud.  Filing a fraudulent tax return is a serious crime.  It can be considered fraud if you underreport your income by more than 40%.

On client of the Stevenson Law Group reported he only made $12,000 in unemployment insurance because he was unemployed for most of the year.  The IRS sent him a letter showing he under reported his income by $60,000 for two years in a row.  That is an 80% under reporting.  The person who used his social security number had filed false tax returns to get all of the money withheld for taxes refunded.  In essence there were no income taxes paid on that income.  He not only faced penalties and interest of about $85,000 but was also threatened with imprisonment for tax evasion and filing fraudulent tax returns.  Through our investigation we were able to find out who had used his social security number to work, but that person had allegedly been laid off and returned to his home country.  The nightmare did not end there, after checking his credit report, our client found over $150,000 in credit card and consumer debt for items he did not purchase or benefit from.

Fortunately, when the police raided the home the person listed as his address about $20,000 of the items were found.  In addition, there were other crimes discovered that were associated with identity theft, drugs and evidence of human smuggling.  Unfortunately for my client the perpetrator was nowhere to be found with my client’s money.  Fortunately he found the Stevenson Law Group and we are helping him through this difficult process.

How do you reduce your chances of becoming a victim?

1. Do not carry your social security card or documents with your SSN around with you.
2. Don’t give businesses your SSN – they don’t need it.
3. Protect and shred your financial information
4. Check your credit every 12 months
5. Protect your passwords – do not answer emails that ask for personal information.  Go directly to the site to see if they need additional information or call the provider.
6. Do not give your personal information over the phone unless there are security measures or you initiated the phone contact.
7. Put a fraud alert on your credit report – this will require people to contact you if you apply for new credit.

What if you are the victim of Identity Theft?

1. Immediately file a police report
2. Contact the Federal Trade Commission at 877-438-4338
3. Contact the three major credit reporting agencies and file a fraud alert on your credit report
4. Close any accounts which have been tampered with .

   Equifax — www.equifax.com 1-800-525-6285

   Experian — www.experian.com 1-888-397-3742

   TransUnion — www.transunion.com 1-800-680-7289

5. Cancel all credit and debit cards and order new ones.

If you are a victim of identity theft or would like more information please contact The Stevenson Law Group at 619-330-9409 or info@stevensonlawgroup.com.