As a society of people, a community of neighbors and friends, we work together to prevent crime and fraud, but we’ve got to hand it them, criminals are getting smarter possibly faster than we are able to prevent it. From fake tax-filing websites that claim to be free, which are really just a ploy to get your personal information, an activity called “phishing,” to actual face-to-face preparer fraud, we see and hear about these instances more frequently than ever before. Not only is the fraud just the result of unscrupulous return preparers, but also, we see now more than ever the ease with which people can abuse the system. For example, I have personally seen an advertisement on craigslist for a woman offering to claim someone else’s child and split the EITC. This is not an isolated incident. I have, also, personally, been told that a client’s wife had sold her children’s personal information for drugs. I wish I was kidding.
The IRS makes attempts at improving the security of tax filing, attempts at strengthening the integrity of the social security number, and attempts at strengthening the integrity of the ITIN. Does anyone remember last week when the IRS had a whistle-blower come out and declare fraud on the IRS’s part, and his story was corroborated by five other IRS examiners? The IRS has a lot on their plate, including protecting their own integrity, and as they attempt to deal with a severe bombarding of fraud from every angle, we, the taxpayers, can expect to see delays in the creation of new tax law and delays in our refunds this coming year.