Verify your tax refund, or someone else might take it
(CBS News) NEW YORK - The IRS is battling a rising tide of refund-fraud cases due to identity-theft.
A sweep last month netted 109 arrests and 189 indictments for a crime that could cost the country an estimated $21 billion over the next five years.
In 2011, businessman Joe Bianco waited patiently for a $10,000 tax refund that never came. The IRS told him the money had already been paid out.
"Somebody had filed with a forged W2 from Walmart, claimed a refund, got the refund, using my name and social security number," Bianco said.
In the past 12 months, the IRS confirmed 770,000 cases of ID theft, up from 250,000 cases from the year before. Thousands more are still under investigation.
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"Total identity theft" growing, authorities fear
"A phony w2 and a social security number and you're in business," said Adam Levin, chairman of Identity Theft 911, a recovery service for victims.
Levin said the crime wave is a result of a faster, digital IRS.
"The biggest problem is that the IRS filtering systems have been altered in an effort to make it more convenient and more efficient. Unfortunately as that process has evolved, security has become compromised," Levin said.
The IRS has doubled the number of ID theft case workers to 3,000. In 2012, it cracked down on 2,400 cases involving phony tax preparers, as well as ordinary employees with access to social security numbers: bank tellers, hospital workers and even members of the armed services.
"My assumption is that it must be awfully easy and it's a lot like crossing a busy street," said victim Joe Bianco. "Somebody's gonna get hit and lets hope it's not you."
Bianco got his refund 90 days after he reported it missing.
The IRS says viligance with personal info is key. But perhaps the agency's best advice is to file early, before someone else files for you.
