The Rise Of Tax Fraud Losses

Let The Fraud Begin, Its Tax Season

Fraudsters bring their “A” game each year during tax season due to the many ways individuals can be defrauded out of their money. The schemes can manifest through emails, phone calls, letters, and malware which either steal taxpayer information or defrauds innocent people out of hundreds of millions of dollars. Individuals are not alone, thieves also target H.R. Departments and company personnel records through phishing emails and malware.

To thieves, tax refund fraud is big business. Per the Treasury Inspector General for Tax Administration there are five segments of citizens that are the highest risk for stolen identity.

  • Deceased – 104,950 Fraudulent Returns for $425 million

  • Elderly – 76,388 Fraudulent Returns for $374 Million

  • Citizens of U.S. Possessions – 76,388 Fraudulent Returns for $374 Million

  • Students – 252,288 – Fraudulent Returns for $695 Million

  • Children – 2247 Fraudulent Returns for $3.9 Million

 

Year over year the number of taxpayers impacted by tax refund fraud is growing, 1.2 million in 2012 to 1.6 million in 2013. The losses resulting from tax refund fraud is growing at a staggering rate from 5.2 billion in 2013 to over 21 billion in 2016. The number of fraudulent returns using student information is not a surprise. Millennials have shown a disregard in keeping their information safeguarded. They are known to openly share information with the understanding they are protected from losses by their financial institution and laws governing credit.

 

Government agencies and tax preparers are at a disadvantage in that they have battled staffing, and technology constraints, as well as suffered from little to no reliable third party verification data when processing or preparing returns.

 

GIACT’s EPIC Platform can reduce the amount of fraud experienced by government agencies and tax preparers by offering in real-time:

  • Validation of the customer’s identity through a combination of name, address, DOB, SSN, phone, email

  • Confirms if the taxpayer is authorized to transact on the account receiving the refund, and if the account is open and in good standing

  • Offers the ability to validate a customer through a configurable out of band notification

  • Provides OCR scanning capabilities of ID, financial instruments, or documents

 

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