Thursday, March 16, 2017

Someone Filed My Taxes for Me

I should be working on my income taxes today instead of writing this blog. I'm not one of those taxpayers who rushes to file for my refund in early February, as soon as the W-2s come out. First of all, I rarely get a refund, and secondly, I have some investments that don't report until March. I take that as my license to procrastinate.

But these days, with identity theft running rampant, it's risky to put off filing your tax return. Two years ago, someone beat me to it.

About this time in 2015, my husband and I received a cashier's check in the mail for $9156.02. Nice sum of money, but we weren't expecting such a payment. I assumed it was a fraudulent check and studied it carefully for the fine print stating that cashing it obligated me to buy something or subscribe to some service I didn't want. My mother-in-law used to receive checks in the mail claiming to be prize money; instructions were included for her to deposit the check and then mail in a "processing fee." But the check we received looked real. I couldn't find the catch.

We even called the police department for advice. "If you got a check you weren't expecting, of course it's fraudulent. Tear it up," they instructed us.

But we were hesitant to tear it up until we knew for sure it was a scam. My husband called the bank that had issued the check and read them the information. "It's real," they told him. "It came out of our San Diego branch that issues refunds for TurboTax."

TurboTax? We've never used TurboTax. And we hadn't even filed our 2014 taxes yet, so how could it be our tax refund?

My husband called the Clark Howard radio show. Clark, a consumer advocate, suggested we go to the IRS website under "Where's My Refund?" and put in my husband's Social Security number, our filing status, and the amount of the check.

Bingo! "Your refund has been processed and $9156.02 has been electronically deposited to your bank account."

Fortunately, the crooks screwed something up, and instead of a direct deposit to a thief's bank account, a paper check was generated and mailed to the address on file with the IRS. Otherwise, we never would have known we'd been scammed.

The fun began. We had to file a police report, alert the credit bureaus, and contact the IRS, who assigned us a special counselor to handle return of the fraudulent check (no, unfortunately, we didn't get to keep the money!) and processing of our real return. Although I'd expected to owe money that year, we actually had a refund due—which we didn't receive until December, after our claim of identity theft had been investigated and resolved.

We never learned how it happened. The same fate had befallen our neighbor the year before; he found out because he filed electronically, and when he pushed the Submit button, he was advised he had already filed a return under that Social Security number. The common denominator was an urgent care facility, where both my husband and neighbor had recently received medical treatment.

So far, thankfully, we have not seen any other evidence of identity theft in our financial lives. The IRS has given us a PIN to use when we file subsequent tax returns. However, we're still experiencing fallout from this incident. Our 2014 state tax return is under audit, because the figures I submitted don't match the numbers the IRS sent them--from the fraudulent return, which arrived first.

Have you ever been a victim of identity theft? What suggestions do you have for preventing it?

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