CBS News has the story New tax scam targeting preparers tricks clients with fraudulent returns.
The criminals get their hands on returns from previous years, then use that information to file new fraudulent returns on unsuspecting victims.
IRS agents showed us where criminals buy those tax returns on the dark web.
It’s too bad that the reporter was not adequately prepared to ask the IRS why they let a copy of your previous filing be enough to file a fraudulent filing for the current year.
When your employer sends you your W-2 form, they send a copy to the IRS too. Your bank, your mortgage lender, your stock broker, and other sources also send duplicate forms to the IRS. This information changes from year to year, so that a previous year’s return will not have this year’s numbers for the con artists to copy.
When the IRS matches the forms it receives with the numbers on your filing, they will see the discrepancies. If the IRS knows about the practice of fraudulent filings, then the IRS should have insisted that the originator of the forms should put a random number on every form. When you enter the random number of each form in your tax filing, and it does not match the IRS’s copy, they should insist on a correction before accepting the form and issuing a refund.
We should all be asking our Senators and Representatives why the IRS does not take simple steps to protect us from fraud. The IRS has, or should have, the computer power to make these safety checks.