What do 3 out of 4 Americans have in common this time of year? And no, it’s not waiting to see who’ll be eliminated from American Idol. The vast majority of us expect to receive a refund from the IRS. The problem is— way too many won’t be getting a check from Uncle Sam any time soon. The reason? Identity theft!
The Federal Trade Commission says a quarter of all identity theft complaints now involve fake tax returns, and with the average return around $3,000, it’s no wonder thieves have moved in. With just a little of your personal information, identity thieves can easily file a false return and steal your refund, especially with electronic filing and direct deposit refunds.
Your first clue will be a letter from the IRS saying more than one return was filed with your social security number. Then, you’ll have to prove to the IRS that your identity was stolen and that you’re still due a refund. And believe it or not that could take up to a year and a half.
Fortunately, there’s an easy way you can prevent identity thieves from intercepting your tax refund— don’t get one! Simply reduce your withholdings to bring your tax liability as close to zero as possible. If you don’t get a refund, thieves can’t steal it.