IRS Beefs Up Refund-Fraud Safeguards

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If you fall victim to identity theft, Internal Revenue Service is taking steps this income-tax season to increase your protection from refund fraud—a third party stealing your tax refund.

IRS says that, although identity thieves might have obtained your information from outside of the tax system, IRS is often the first to inform a victim that identity theft occurred.

Consequently, IRS expects this tax season to double, to 1.2 million, the number of Identity Protection PINs that are assigned to taxpayers who are identified as identity-theft victims. Having this PIN will allow you to avoid delays in filing a return and receiving a refund. You can report that you’re a victim of identity theft at irs.gov/uac/identity-protection to apply for a PIN.

IRS says the six-digit PIN shows that a taxpayer is the rightful filer of the return. (The PIN that’s assigned for your 2013 return also identifies you as legitimate for any delinquent 2011 or 2012 tax returns that are filed in 2014.)

In 2013, IRS launched 1,492 identity-theft-related investigations, which was up 66 percent from 2012. Indictments and sentencing of identity thieves who stole tax refunds doubled in 2013 to 298, compared with 2012.