Identity Thieves Targeting Tax Refunds
(CBS) -- It has to be a pretty sickening feeling to file your taxes only to discover somebody already has. You can't get your money right away and your identity has been stolen. Chicago is among the top five cities for refund-related tax ID theft.
In this original report Dorothy Tucker takes a look at how easy it is to become a victim and what you can do to protect yourself.
Credit cards, medical records, student records, bank loans, job applications, they all have your social security number, and they're all places thieves look to steal them.
"I don't know how this could have happened," said Appollonia Bullard.
Whoever stole her social security number used it to file a fake tax return, a discovery the 21-year-old store clerk made when she tried to file herself, expecting a $4,300 refund.
"It's not their money. It makes me very angry," said Bullard.
We're only five weeks into the tax season and she is already one of nearly 100 taxpayers in Chicago who have become victims of refund fraud.
"It's bad and the IRS is on it but it's getting worse," said William Kresse, Director of the Center for the Study of Fraud and Corruption at Chicago's St. Xavier University.
Last year in just the first six months 1.9 million taxpayers were victims of identity theft. Compare that to all of 2011 when there were about a million.
"We're seeing an increase in this because the criminal element if you will have figured out what a lucrative and easy way of making money this is," said Kresse.
"This is actually the paper. It showed that it wasn't me," said Bullard.
She now has the paperwork to prove she's a victim of ID theft and is working toward getting her refund. But tax advocate Jacquelyn Crossley Smith says it won't be easy.
"Unfortunately, identity theft is a traumatic crime," said Smith.
And it could take up to a year to finally get your tax refund, which is why protecting your social security number is critical.
"If you have a social security number. If you have personal information you're at risk," said Smith.
The number one tip: file fast.
"Identity thieves tend to file as early as they possibly can. When the actual taxpayer files it's too late," warned Smith.
More tips: never carry your social security card in your wallet; don't give anyone your number without checking their credentials; and once your tax preparer finishes your taxes keep your original documents.
Bullard said straightening out this mess has been "Chaotic, time consuming, tedious."
Although the IRS detects and prevents a large amount of fraudulent refunds, there is much it does not detect. Federal officials estimate the IRS could issue some $26 billion in fraudulent refunds in the next few years if the agency doesn't get a better handle on the problem.
