Identity Theft May Cost IRS $21 Billion Over Next 5 Years

alphadogg writes "A new audit of the Internal Revenue Service has found the agency paid refunds to criminals who filed false tax returns, in some cases on behalf of people who had died, according to the Treasury Inspector General for Tax Administration (TIGTA), which is part of the U.S. Treasury. The IRS stands to lose as much as $21 billion in revenue over the next five years due to identity theft, according to TIGTA's audit (PDF), dated July 19 but publicized on Thursday. 'While the IRS does not have access to all third-party information documents at the time tax returns are filed, some third-party information is available. However, the IRS has not developed processes to obtain and use this third-party information."

Comments

but I wanna know

[ganjadude]

How much AC lame first posts cost us, preferably in LoCs

The IRS also gains money from identity theft

[Solandri]

Several years ago, we found out some of our employees were illegal immigrants who had applied using fake SSNs and IDs. When I thought of the consequences, I realized the IRS collected FICA taxes from these people (social security, medicare) which would never be paid back to them. And if they were due a refund on their income tax withholdings, they were unlikely to ever claim them.

Re:The IRS also gains money from identity theft

[Anonymous Coward]

The head of the SSA recently estimated that about 80% of employed illegal aliens in the US are using a fake social security number.

Assuming $10K/yr in average wages for this group, that's between $10 billion and $15 billion in tax revenue.

Re:The IRS also gains money from identity theft

[Anonymous Coward]

Not so sure about that with a fully -fake- ssn (ie, it doesn't exist) since the taxpayer in question probably won't claim it. If however, it was done using a -stolen- (ie: belongs to someone else) ssn, it would be credited under that ssn for the year. When the legit taxpayer files a return, they'll crosscheck the numbers, and if there is a difference, they'll issue a 'correction' and give them a larger return.

Re:The IRS also gains money from identity theft

[Anonymous Coward]

A lot of those illegals working under fake SSNs also have officially issued ITINs--like SSNs, but used only for tax returns (because we give "refunds" to a lot of people who pay no taxes). So the illegal works and has taxes withheld with the phony social, then files a tax return with no income and a passel of kids (some with SSNs, some with ITINs) to claim the EITC and other refundable credits. Who really knows whether it's a net gain or loss to the government?

Re:The IRS also gains money from identity theft

[ClickOnThis]

Several years ago, we found out some of our employees were illegal immigrants who had applied using fake SSNs and IDs. When I thought of the consequences, I realized the IRS collected FICA taxes from these people (social security, medicare) which would never be paid back to them. And if they were due a refund on their income tax withholdings, they were unlikely to ever claim them.

FICA taxes are collected also from many legal residents on temporary work-permits, although some are exempt for an initial period of time (e.g., J-1.) I'm not an expert on this, but I think people in these circumstances might never collect on medicare if they're not present in the USA, although I think they could still collect social security even from outside the USA if they're vested.

Re:The IRS also gains money from identity theft

[GodfatherofSoul]

Last figure I saw put that at around $6 billion.

Re:The IRS also gains money from identity theft

[girlintraining]

True, but many would, and have, argued that illegal immigrants should receive no government services of any kind, that they're taking jobs away from 'real' americans, etc. So maybe they won't get their taxes back, but they still got a paycheck for a whole lot more. And, not legally, I might add.

That said, the problem of legal immigration by false reporting by corporations is a larger problem than illegal immigration; Corporations that can afford to pay to have exemptions carved out for their industry (H1-B anyone?) can undercut labor in this market; They manufacture a labor shortage by intentionally paying far less than market rate for domestic labor, then use that to justify importing people from other countries who will work at that rate, thus undercutting the market value for that labor. But that only works for highly-trained labor that isn't tied to geography (You can't outsource doctors, for example, because someone has to do those procedures on the patients... though robotic medicine may eliminate that in the future). Farm labor, which we have a massive shortage of, doesn't get the same treatment -- which results in a lot of illegal immigrants working on farms. Of course, if you get rid of them, then you don't get to eat, since all the food rots in the field, unharvested.

Immigration is a much more complex issue than most people care to admit, and the same politicians that claim they're getting tough on it are often carving out exemptions and bypassing the process... for anyone who can pay enough in *cough* campaign contributions *cough*, of course.

Re:The IRS also gains money from identity theft

[Qzukk]

Unless the illegal put 50 exemptions on his W-4 and had no withholding.

Then the sucker whose SSN was stolen has to explain why the government has more W-2 forms than he does.

Re:The IRS also gains money from identity theft

[Anonymous Coward]

This is part of the reason we need to stop calling this identity theft and start calling it what it really is: Tax fraud. Same with banks. Someone pretends to be me and tricks the bank into given them money, it's bank fraud. My identity wasn't stolen. I'm just fine. The bank made a mistake and they need to clean up the mess not me. Calling it identity fraud puts the blame on me instead of the bank who made the mistake.

Re:The IRS also gains money from identity theft

[Anonymous Coward]

Unless the illegal put 50 exemptions on his W-4 and had no withholding.

Then the sucker whose SSN was stolen has to explain why the government has more W-2 forms than he does.

That plan would be foiled after a single tax season the way you described it, it wouldn't be remotely sustainable. Try again.

Re:The IRS also gains money from identity theft

[cpm99352]

According to the law, illegal aliens are entitled to Social Security if they have paid into the system. https://www.fas.org/sgp/crs/misc/RS21732.pdf

Re:The IRS also gains money from identity theft

[ClickOnThis]

According to the law, illegal aliens are entitled to Social Security if they have paid into the system.https://www.fas.org/sgp/crs/misc/RS21732.pdf

It's quite a bit more complicated than that. They may or may not be able to collect, depending on many factors, such as what country they're living in, whether they ever had legal work status while they had a SSN, and so on. The details are all buried in the various editions of the Social Security Protection Act of [insert almost any year after 2000]. TL; DR.

Even legal permanent/temporary workers and US citizens who have paid into social security may not be able to receive benefits, depending on where they live.

Re:The IRS also gains money from identity theft

[aaarrrgggh]

A non-issued ssn (if such a thing exists) would raise flags quickly, but a name mismatch is only generated after filing a tax return with the incorrect number.

If you don't report the income, and the IRS catches the discrepancy, it just goes to government coffers.

Does the government knowingly accepting taxes with bogus SSNs make them complicit in illegal immigration?

Re:The IRS also gains money from identity theft

[ClickOnThis]

This is part of the reason we need to stop calling this identity theft and start calling it what it really is: Tax fraud. Same with banks. Someone pretends to be me and tricks the bank into given them money, it's bank fraud. My identity wasn't stolen. I'm just fine. The bank made a mistake and they need to clean up the mess not me. Calling it identity fraud puts the blame on me instead of the bank who made the mistake.

I completely agree with your "don't blame the victim" message, and the need to avoid terms that falsely direct that blame. However, I'm not sure we can stop calling it "identity theft." For one thing, it has become a catch-all term for any kind of fraud that involves someone impersonating you for financial or other gain. It's far pithier and handier to refer to this class of crimes as identity theft than to force some awkward construction of tax/bank/credit/bitcoin/online-gaming/slashdot-karma fraud. And I wouldn't be so quick to discard "identity fraud" as an alternative. I think I like it better, because in a way it decouples you from implied blame that "identity theft" does not.

Also, it may not be your fault, but that doesn't mean you can just sit back and let someone else fix it. The banks must replace your money, the tax-collectors and credit agencies must correct your records, those who made mistakes must restore your losses ... in short, you must be made whole again. But that doesn't mean you don't have to do anything to make that happen. Like it or not, you're involved, and more likely than not, you're the first one to discover the crime. Any victim has to at least participate in the process of restoring what s/he lost.

Disclosure: a few years ago I was the victim of tax fraud in exactly the way TFA describes: someone filed a tax return using my name and SSN. Fixing this did require some work: phone calls, police reports, letters, affidavits, untangling some SNAFUS with other gov't-related stuff in process. The effort was unwelcome and untimely (I found out about it only when I tried to refi my house.) It sucks being a victim, and it should not be an onerous task to recover from being one. But I don't question the need for a victim to be at least somewhat proactive with her/his recovery.

Re:The IRS also gains money from identity theft

[the eric conspiracy]

> That said, the problem of legal immigration by false reporting by corporations is a larger problem than illegal immigration

For a certain cohort of workers that want to protect their salaries it is an issue. For the society as a whole not so much. These are highly trained workers that are definitely a positive for the overall economy.

Illegal immigration is a real problem for the society. There is a significant economic cost for the services that are required to deal with issues created by this group - crime, disease, law enforcement, etc.

Re:The IRS also gains money from identity theft

[girlintraining]

For a certain cohort of workers that want to protect their salaries it is an issue. For the society as a whole not so much. These are highly trained workers that are definitely a positive for the overall economy.

You may be right, but that doesn't eliminate the fact that businesses benefit from a lower labor cost by exploiting that labor's desire to live here: If they are fired, they have to go back to the country they came from. Many would consider that unethical, and immoral... but you are right, it's good for the economy, and totally legal.

Re:The IRS also gains money from identity theft

[Firethorn]

With a few exceptions, there ARE americans that will do the jobs that the illegals will do. We just won't do it for the money they will, which is why we were displaced in the first place.

The second would be skillset - there are jobs that most americans just don't train enough in - picking fruit, sowing clothing, etc... This is partially a result of our de-emphasis on skilled trades and emphasis on college education. And yes, things like picking fruits and vegetables are skilled. They might not require an education, but they do take practice.

I mean, 'American's won't do it'? We have Americans who will dive into sewage to do welding work. We just won't do it for less than a six figure income(sewage diving IS a rather specialized skill).

Re:The IRS also gains money from identity theft

[AmazingRuss]

Anybody under 50 isn't going to get any meaningful social security payout anyway. Illegals aren't special in this way.

Re:The IRS also gains money from identity theft

[Jason Levine]

I was a victim of Identity theft and can say from experience that there are two components to the crime. There's the bank fraud or tax fraud portion where someone uses your information to get money from a bank or file a tax report in your name. (In my case, it was a credit card in my name which - luckily - the thieves messed up on and had delivered to my house.) Before they can do this, though, they need to get your information. *THIS* is the portion that I'd call "Identity Theft." In my case, I'll never know how they got my information. (The credit card company was unhelpful and the police either didn't have a clue how to pursue it, didn't care about a crime that was caught before any monetary damages were done, or didn't want to spend resources looking into a crime when the jurisdiction might shift to another area.) All I know is that the thieves somehow stole my name, address, social security number, and date of birth. Some might quibble about my use of "stole" when I still had access to it, but considering that they attempted to leave my identity in worse shape than when they began (by running up a huge credit card debt) and considering how I had to freeze my credit to prevent future identity theft instances (after all, my information is now out there so who knows when they or someone else will use it again), I'd say my identity was definitely damaged by their use of it. I don't have it in the same way as before they stole it.

The IRS doesn't agree.

[paxprobellum]

Right from the first page of the report: "However, in view of its ongoing efforts to improve the detection of identity theft, the IRS did not agree with TIGTA’s estimate of $21 billion in potentially fraudulent refunds as a result of identity theft over the next five years." So what DOES the IRS think?

Re:The IRS doesn't agree.

[Anonymous Coward]

So what DOES the IRS think?

Considering that the IRS is so lazy and incompetent about checking their data that they sent 2,137 refunds totaling $3.3 million to a single address, and that fact is now known to the public, they should realistically expect the amount of fraudulent refunds to be dramatically higher than the $21 billion estimate.

Re:The IRS doesn't agree.

[tomhath]

To their credit, it was an IRS audit the reported those refunds. After the fact, unfortunately.

You would think

[Bananatree3]

$21 billion in savings alone would be enough to figure out a solution. I know.... I new agency-wide IT project!!

the IRS has not developed processes to obtain...

[fustakrakich]

Maybe they could start by saying, 'Please'...

"You gotta ask me nicely."

I had someone file under my SSN this year.

[Anonymous Coward]

I filed my taxes on February 3rd electronically and found out someone had already filed under my SSN. I filled out the correct paperwork and sent it in, along with opening a case with the FTC and heard nothing from the IRS until I went into my local office 2 weeks ago. I found there is an open case but that I will be lucky to see my return (approx $1500) within 2 years. I have filed my return from the same address for several years, and it was my second year filing jointly with my wife. I believe there is little to no fraud detection at the IRS, as a tiny amount of research on their part would have stopped this entire mess.

Re:I had someone file under my SSN this year.

[Adult film producer]

I believe there is little to no fraud detection at the IRS, as a tiny amount of research on their part would have stopped this entire mess.

Have to agree with you there considering this most recent story,

IRS Accepts 2,137 Returns From ONE Address in forum

Re:I had someone file under my SSN this year.

[TFAFalcon]

That's the price you pay for a society that resists mandatory personal ID.

Re:I had someone file under my SSN this year.

[Qzukk]

Because the mandatory personal SSN worked so well.

Re:I had someone file under my SSN this year.

[TFAFalcon]

So because they did the worst possible thing once, it should never be fixed? SSNs have the problem of being insanely easy to 'steal' combined with being the only thing each citizen is sure to have. So anyone that wants to check your identity has to accept them as 'proof', since there is no requirement for any other way of identifying yourself.

If you think SSNs are such a bad idea, just imagine if even they would not exist. How would you identify yourself? Just by your name - plenty of people have the same name, By name and address? Changing your identity suddenly becomes as easy as moving (or just registering at a different address). And what prevents a random person from claiming they're you?

With a government issued foto ID the identity thief at least has to go to the trouble of forging a card, rather then just obtaining a widely used number.

Re:I had someone file under my SSN this year.

[lightknight]

Because a mandatory personal ID will somehow prevent fraud. Right. Gotcha.

Re:I had someone file under my SSN this year.

[the eric conspiracy]

This is like using a nuclear bomb to kill a flea.

All the IRS has to do is track a bit more information tied to the SSN and check it. Like home address and employer address.

If the return doesn't agree with data on file bounce it.

Re:I had someone file under my SSN this year.

[Bourdain]

While I'm a CPA but not a tax accountant, I'd suggest asking a tax accountant about the option of "underwithholding" to the tune of $1500 for this next year and apply this unpaid refund against your balance a method to avoid this issue, at least in part, is to structure your tax payments and withholding to never yield a refund from the IRS in the first place which is not a perfect science but can be pretty close in most cases if you're organized...

Re:I had someone file under my SSN this year.

[CodeBuster]

While I'm a CPA but not a tax accountant

Indeed.

I'd suggest asking a tax accountant about the option of "underwithholding" to the tune of $1500 for this next year

Doing what you suggest is probably illegal and may, depending upon how much is "under-withheld" or under reported (if self-employed), result in penalties if the difference between what should have been withheld or paid and what was actually withheld or paid exceeds a certain threshold (penalties begin after about $1,000 difference or so and climb from there). Also, it says specifically on the W-4 instructions that claiming allowances to which you're not entitled, regardless of whether or not they result in the "correct" amount of witholding, is unlawful. Trying to "hack" your tax filings to the IRS is a really bad idea. They can follow you to the ends of the earth, seize your assets and your bank accounts, and generally make your life extremely difficult.

Re:I had someone file under my SSN this year.

[TFAFalcon]

It won't come close to preventing it. But it will require the criminals to at least put some effort into it. And if filing a false tax return suddenly requires a few days of work ( compared to a few seconds) for a hundred dollars it might no longer be such an attractive way of making money.

Re:I had someone file under my SSN this year.

[TFAFalcon]

And those things don't change do they? A person could move every year, and have ten jobs each year. And and ID card is not that much of a burden for a person to carry. Think of a smaller, harder to forge driver's license.

Re:I had someone file under my SSN this year.

[tuck182]

But they could flag for more careful review anything that didn't match (ie, any return going to an address that's inconsistent with any of the W2's or previous addresses on file) and expedite any returns that ARE consistent. It would be a way for them to focus their fraud prevention efforts, rather than just saying, "Oh it's too difficult to track, so we'll just mail out a return to anywhere, no questions asked."

Re:I had someone file under my SSN this year.

[DanielRavenNest]

They can follow you to the ends of the earth, seize your assets and your bank accounts, and generally make your life extremely difficult.

They can in theory, but in practice they are underfunded and slow to process paperwork. So it becomes a gamble if your name comes up to be harassed before the prior years straighten themselves out.

Re:I had someone file under my SSN this year.

[hellop2]

I can imagine SSNs not existing. What's so bad about that? How would I identify myself? Like this: "Hello, here I am."

If SSNs didn't exist then it would stop a lot of identity theft. I have creditors calling me for things like unpaid phone and electric bills in states I never lived in. This could not happen if there were no SSNs. I can't think of one good reason for Gov't mandated unique identifiers except for the purposes of totalitarian oppression.

Take for example: wage taxes. An idea once fought against: "The power of direct taxation applies to every individual ... it cannot be evaded like the objects of imposts or excise, and will be paid, because all that a man hath will he give for his head. This tax is so congenial to the nature of despotism, that it has ever been a favorite under such governments." And guess what, our so called "income taxes" supposedly temporarily enacted for national security during war time, has enabled our imperialist gov't to wage war ever since. IMHO, a wage tax, as opposed to a tax on true income which you earn passively from the sweat of others, such as a business's profit, is abhorrent. It makes murderers of us all as we have no way to avoid funding wars designed to secure the affects of the rich by grinding the blood and bones of the common man.

I suppose you'd counter with, "How would people buy small things on credit?" Well, they wouldn't. You secure credit with equity. Society still managed to progress ~70 years ago before credit cards. The SSN and small lines of credit are a bane on society used by people who lack critical thinking skills about the tools of totalitarianism and algebra. Giving a broke person a $100 line of credit which ends up costing them $800 in fees because they're broke is definitely not in their best interests. All the ridiculous profits made by credit card companies is money extracted from the local economy to the direct detriment of the poor.

Give me one good example of where an SSN is not used by a totalitarian regime to subjugate the poor.

The poor don't need credit cards. And they don't need SSNs. Wages are not income. Gasoline should not be cheaper than water. There is no news at 11. Question authority. Eat the rich!

Re:I had someone file under my SSN this year.

[Jason Levine]

As someone who has had his identity stolen, I'd recommend freezing your credit. Depending on your state, you might be able to do this for free. The credit agencies will push fraud alerts, but those are very ineffective. They may or may not alert you if someone opens a line of credit in your name, but they're completely voluntary. A credit freeze, though, will block anyone from opening any lines of credit unless you first thaw the credit. Yes, it means that you won't be able to sign up for that store credit card to get 10% off right then and there and you'll have to thaw your credit in advance if you decide to buy a car, but it also means whoever has your SSN can't use it (and any other info they have on you) to open loans/credit cards/etc in your name. I'd also recommend getting a credit report from each credit agency (you get one free one from each agency every year) and going over them with a fine tooth comb for anything out of the ordinary. That last item is good advice for everyone, not just identity theft victims.

Re:I had someone file under my SSN this year.

[TFAFalcon]

How about social security?

Re:I had someone file under my SSN this year.

[hellop2]

Are you giving me an example of a massive fuckup as evidence why we don't need SSNs?

*sigh* Here's a video suggesting why we're fucked by the rich through SS. Jump to 4:15 and 6:10 to to feel that fucked by the gov't (rich people, Bush, right-wing tools) feeling once again.

Really, capitalism is based on continual growth, which is impossible. I wish we humans could produce some smarter outlier individuals like Einstein, Newton, Aristotle, etc... A Tesla of Economics who could formulate provable optimal strategies for the world economy. Seems logically possible. The problem is these kind of economic/social theories are too complex to be understood in the context of a democracy (*cough* republicans, "Jesus says birth control is evil."). Then without a drastic switch in the "purpose" of our gov't, from "ensure no limit to individual power" to "ensure a sustainable way of life".... and/or, a benevolent dictator, we're all fucked.

Re:I had someone file under my SSN this year.

[Bourdain]

Can't you apply non-yet received refunds against your liability though?

Re:Yep

[gatfirls]

The resounding theme is "go big or go home" with federal crimes it would seem: Claim >x% year over year for entertainment, bend over and grab your ankles. File a completely bogus return after paying zero taxes for a 3k$ refund? Profit. Take advantage of an ATM giving out money? 6 years jail. Take advantage of holes in the SEC/Banking rules to the tune of billions? 1% fine.

Too Easy!

[Greyfox]

Judging from its performance last time I was on it, I'd say they're way ahead of schedule! Bam!
Shall we try another? Ok!
They've been killing their network all along! Bam!
Ohhh... I could keep this up for hours...

Good thing we cut the IRS budget

[GodfatherofSoul]

Can't have the revenue man collecting taxes or anything like that.

Equality!

[Rastl]

If the IRS is allowed to impose fines and penalties for tax return issues shouldn't they have the same fines and penalties imposed on them for accepted fraudulent tax returns? Simple enough - once they find AND correct the error they apply the same formula they use for the taxpayers and tack it on as NON-TAXABLE income to the correct return.

That would be some incentive for them to look into and resolve problems quickly.

Re:Equality!

[DRJlaw]

That would be some incentive for them to look into and resolve problems quickly.

Because losing the claimed refund amount (which anecdotally appears to be in the high 4 figures, greater than the typical refund) somehow costs less than the interest and penalties that would be reversed on the actual refund amount due?

Nevermind that the IRS doesn't lose the money and wouldn't pay those amounts, but the general treasury does and would.

Just look to the mortgage crisis, where the party in control (the mortgage broker) has no financial stake and the party bearing the losses (the bundled security buyer) bears the loss, to predict the behavior in this instance.

Re:Equality!

[CodeBuster]

If the IRS is allowed to impose fines and penalties for tax return issues shouldn't they have the same fines and penalties imposed on them for accepted fraudulent tax returns?

The IRS subject to the same rules as you or I? LOL, never happen. The IRS has long enjoyed effective immunity to any penalties, no matter how incompetent they are , while penalizing the average taxpayer mercilessly for even the smallest and most innocent mistakes. All of this due to a tax code which even US Senators and Congressmen have conceded on numerous occasions is needlessly complicated, contradictory and nonsensical. Under such circumstances errors or disputes are practically inevitable. BTW, if you think that ObamaCare is going to save our health care system, just look at the US Tax Code for a preview of what happens when the government tries to run something, whether that be collecting taxes or managing health care (which is arguably even more complex than collecting taxes); it's a complete clusterfuck every time.

Re:Equality!

[shentino]

And bam, incentive for collusion.

Nice

[J'raxis]

Thieves stealing from thieves. Nice.

Re:Nice

[Sulphur]

Well, there is no honor among thieves.

Contraire Pierre, they honor each other by stealing from them.

Re:Nice

[J'raxis]

Taking something from someone without their consent is stealing no matter what sort of legal or mental gymnastics you try to perform to make it not so.

Identity Theft May Save People $21 Billion Over Th

[Normal Dan]

e Next 5 Years
A better headline imo.

Re:My brother was a victim this year

[tomhath]

He needs to adjust his withholdings so he doesn't get a refund. Loaning the IRS money interest free is dumb.

we is your IRS. need help getting cash at USBANKS

[swschrad]

that's some identity crisis. I blame congress' split personality... .

Re:Why 5 Years?

[cvtan]

They don't have the time or the manpower.

Re:Funny way to phrase it

[sithkhan]

Mod this guy up!

Re:Why 5 Years?

[PPH]

And some people move around a lot. So the con artists pose as transient laborers or some other group without a solid trail of identity.

The problem with all of the proposed solutions is that: In order to weed out the fraud, the new measures will impose onerous reporting/tracking requirements on the entire taxpaying population. And the additional burden will be placed upon us with no compensation or credit for our wasted time.

Perhaps its time to dump income tax entirely and collect revenue from businesses. They already have detailed reporting requirements and operate in an environment with no rights save those for which they have been granted permission. It's more difficult to chase individuals who are presumed to have the rights to any activity aside from those constitutionally or statutorily denied.

Re:Small change

[NemoinSpace]

See the multiple events that occurred in 1983?
The word "They" was officially substituted for "US" into the lexicon
"They" switched from the '67 dollar to the '83/'84 dollar. Making believe inflation didn't happen.
"They" started teaching us to do math with calculators, thus leading to the inevitable statement above.
Please send me 1.7% of your yearly salary. It's nothing when you consider your total income as a whole.
Besides, you didn't earn that money. THEY gave it to you.

Hey IRS, the Social Security Administration called

[gatkinso]

...they want their insecure ID number back.

Re:Illegals already get deductions for kids in Mex

[gatkinso]

Illegal immigrants file tax returns?

Perhaps the IRS should crack down on SSN abuse!

[erroneus]

The SSN was not supposed to be used for anything but social security. And what do we have? The SSN is being used in precisely the way the "doom sayers" predicted before it all came to be. But now we are seeing where this practice is costing the government Billions of Dollars. Perhaps NOW is the time to extract some SSN abuse reform?

Re:Perhaps the IRS should crack down on SSN abuse!

[erroneus]

I would propose making it illegal to use the SSN # for anything but a social security number. I would propose that if the credit system is to be used, let the credt system figure out a better way without government support and enforcement.

I would also propose a great many other things but perhaps it will make me sound like a nut job. But not really. I just want a return to the way things were before they became "status quo." Things are a mess which drains and victimizes the working class. It's amazing how bad things can get as people remain asleep. What was that we heard recently? a $440 million dollar bug in trading software? Isn't it time to ban trading software? Or at least limit it in some way?

None of the changes I propose would topple any leaders, financial or otherwise. It might make them have to pay more or to be more careful who they lend money to and all that. Enslavement of the masses doesn't need to be as easy as it is now. We should at least make them work at it a little... cost them some money or something. The way things are now, we're lambs for the slaughter and government not only makes it easier, but they take all the risk and make up the difference when there are loses. That's the very same government which gets money from our rising taxes... enslaving us all even further.

Change that fell into the couch.

[the eric conspiracy]

$21 billion sounds like a lot, but over 5 years it's 4 billion a year.

US tax revenues are what? 3 trillion a year? That's about 0.1% we are talking about.

Betcha that there are much holes in the tax system than this.

Then of course there is the question of how much the counter-measures would actually cost, and whether or not the counter-measures would actually reduce fraud rather than just cause the crooks to find a different mode of exploitation.

As usual just throwing out a statistic doesn't provide anything more than a talking point.

No Incentive

[Slugster]

Why not wait until after the Tax deadline, before paying any refunds? If there is potential fraud, there will be at least 2 unique returns, for the same SSN?

Well, because. Quick refunds are the incentive that the IRS is using to get people to pay online.

The way one common scam works is this:

1--someone steals your SSN, obtains a throwaway prepaid debit card and uses your SSN and name to file a fake return online for a few thousand dollars refund.

2--the IRS cheerfully pays out the refund in 5-7 days after verifying that the math on the return is correct, even though they cannot verify the W-2 or other information that fast. (IIRC it takes them about 6 weeks to verify W-2 info)

3--in a few days the refund hits the thief's debit card and they "spend it off" by buying money orders (so that the IRS cannot take back the money off the debit card if they discover the fraud), and then the person throws the bank card away. It is only when a second return is filed that the IRS stops everything and realizes that there is a problem.


I tend to suspect that there is not much actual incentive to fix this issue from a lot of corners, since it is just pumping even more money into the dying US economy.
The IRS knows very well how big the problem is but under the current system can't do anything to stop it, and simply refuses to publish any actual numbers.

Re:Identity Theft May Save People $21 Billion Over

[tuck182]

If you think that's a fitting headline, I don't believe you actually read the story.

The money the IRS is losing is money they paid out to criminals filing returns with fraudulent information and claiming a refund. This is ultimately going to cost citizens (both for the initial false payouts and for the costs to clean up the mess), and the only people who win here are the criminals taking advantage of a broken system.

Hello, my friends

[hellop2]

Please take a look at this video.

It was uploaded 1.5 years ago, and has only 460,000 views. Obviously, it has not yet experienced the "Slashdot effect." Don't you think maybe, it should?