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Tax Services Advisory - Reports from IRS, FTC Provide Added Reasons to Take Precautions for Identity Theft

Thursday, March 15, 2012 - Mark Thaw, CPA/ABV/CFF, CVA

Mark Thaw

Ana Larias

Recent reports from the Federal Trade Commission (FTC) and the IRS provide reinforcement to all taxpayers of the urgency to take steps to make sure that they are safeguarding all of their financial information, personal and business, from potential identity theft.

The IRS on February 16 put identity theft at the top of its list of "Dirty Dozen" tax scams for 2012.

The IRS said there has been an increase in identity thieves looking for ways to use a legitimate taxpayer's identity and personal information to file a tax return and claim a fraudulent refund.

An IRS notice informing a taxpayer that more than one return was filed in the taxpayer's name or that the taxpayer received wages from an unknown employer may be the first information about that fraud.

The IRS Web site has a section on preventing identity theft and recovering stolen information.

The FTC on February 28 released its report on consumer complaints for 2011, with identity theft ranking first in the number of complaints for the 12th consecutive year. It received 279,156 complaints on stolen identities last year, a 12 percent increase over 250,854 in 2010.

That was just a portion of what the FTC estimates as nine million cases of identity theft in the United States each year.

Some identity theft numbers in the report for 2011 are alarming for businesses in Florida and several other markets where MBAF has offices, and where we can advise businesses on maintaining, updating and testing identity theft programs.

  • Florida was first in per complaints, with 178 per 100,000 in population.
  • New York, New Jersey, Maryland and Colorado ranked in the top 11 in per capita complaints--all with at least 83 per 100,000.
  • Miami-Fort Lauderdale-Pompano Beach was first among Metropolitan Statistical Areas with 324 complaints per 100,000.

The FTC Web site has a section for businesses and individuals on how to deter, detect and defend against identity theft,

Since January 1, 2011 the FTC has been enforcing its identity theft Red Flags rules for businesses that are involved in the extension and approval of credit.

The FTC can assess fines and civil penalties for violations that include not having adequate systems for detecting suspicious activity that could result in theft of a customer's identity. It has authority to review complaints and to conduct audits of businesses that are subject to its identity theft rules.

If you would like additional information on steps you can take to safeguard your business and personal financial information from identity theft, do not hesitate to contact our Tax specialists or call us at 1-800-239-1474.