A Hacker Stole Our $3,500 Tax Refund

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The fact that a hacker was able to steal this couple's refund was bad enough, but it paled in comparison to how the IRS handled the case after the fact. :(

And it's all because someone stole Eric's Social Security number -- and claimed a refund in his name. Now the couple's entire tax refund is being held at the IRS. The agency told them it could take six months to clear up. But similar cases have taken years. And they're now busy filling out government forms, forced to file via paper mail and not hearing any updates from the IRS.
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Wow. 2 years later and people get their refund. They need to expand that PIN program to nationwide soon. Otherwise, it's going to keep getting worse. Sadly, if it was Anaheim, it's another thing that shows that SSN's shouldn't be used as identification numbers for anything and everything....
 
They've been saving up diligently since 2013. Combined with their summertime lump pay, they'd have just enough to start shopping for their first home together. Instead, when their lease is up this month, they'll be moving in with his mom.
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Somehow I'm guessing a $3,500 wouldn't make or break whether or not you are allowed to buy a house.

That said this kind of floors me that all you need is a name and SSN. How the hell does the refund go to someone else? On my tax forms that get sent to the IRS it has my bankrouting number to have it sent there. Does someone else fill our taxes in my name and somehow they forge a W2 form as well?
 
You know for a fact that if these people OWED the IRS, there would be all kinds of resources to collect that money. :(
 
sfsuphysics said:
That said this kind of floors me that all you need is a name and SSN. How the hell does the refund go to someone else? On my tax forms that get sent to the IRS it has my bankrouting number to have it sent there. Does someone else fill our taxes in my name and somehow they forge a W2 form as well?
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Crooks just make up a W2. The IRS doesn't validate the W2 at the time the refund is made because their system lags; see

http://blogs.wsj.com/totalreturn/2015/02/17/quick-processing-of-tax-refunds-is-handy-for-fraudsters/
 
Of course all this could be avoided and save everyone millions if the IRS adopted automatic tax returns on their website like most other sane countries have done. They already know everything they need to do the return.
 
MrCrispy said:
Of course all this could be avoided and save everyone millions if the IRS adopted automatic tax returns on their website like most other sane countries have done. They already know everything they need to do the return.
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But then all the tax preparation companies would go out of business and all those people that work for them would be unemployed! Oh noes! /sarcasm
 
Part of the issue for the IRS is that the federal government receives wage information from employers in spring, much later than workers do. So when employees go to file tax returns, the IRS doesn’t have the employer information to check against.
 
MrCrispy said:
Of course all this could be avoided and save everyone millions if the IRS adopted automatic tax returns on their website like most other sane countries have done. They already know everything they need to do the return.
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Then the government would loose a tool. One that is use to intimidate the public. Or use it to advantage favored groups and disadvantage unfavored groups. If that was automated, you couldn't hide that behind feigned indignation and 'failed' hard drives.
 
My coworker tried to file his taxes on Monday electronically and the e-file was rejected because he had already filed as someone's spouse. The problem is: he (nor his wife) had filed anything, yet.

Now he's jumping through hoops getting all of the necessary docs needed to prove identity theft.

Krebs on Security had a recent article on this very thing and the thieves are using the IRS's very own website to steal identities and file fraudulent tax returns.

All of my co-workers and I were able to create an account using the IRS website and get a transcript. My unlucky co-worker, who never visited this site before, couldn't create an account not could he request a forgotten password.

I recommend everyone create an account on the IRS website just so identity thieves cannot. Once you see what's available from your IRS Transcript you'll be glad you stopped someone from being ablr to get that info...All previous tax returns, W2, etc. with full SSANs of you and your dependents.

Cliffs:
Co-worker had this happen this week.
IRS website has all of this info.
Create an account there to protect your info!
 
A couple of years ago it happened to me. I got my refund 9 months later. I filed almost as soon as possible and so I caught the would be thief but it was still a major hassle. Now I make sure that the IRS gets as little as possible of my money throughout the year so that when it comes to filing time I only get a little back.

FYI in my case the only thing that appeared to be accurate from what little info the IRS would tell me was my social. They made fake job W2 info and everything. The next year when I attempted to file I had the issue of not knowing my AGI from the previous year b/c the IRS retains the false info instead of replacing it with the correct info.
 
This is what they get for overpaying their taxes. IRS interest rates are LOW, better to underpay, invest well and settle up in April.

Don't loan the IRS money for free, if they don't want to pay you back you're up sh*t creek.
 
Steve said:
You know for a fact that if these people OWED the IRS, there would be all kinds of resources to collect that money. :(
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The government will spend (our) dollars to recover dimes (probably more like pennies). And they expect interest when you owe them, and they ant they want their money NOW. When they owe you it's interest free and they're in no rush to get it to you. :mad:
 
Kueller said:
This is what they get for overpaying their taxes. IRS interest rates are LOW, better to underpay, invest well and settle up in April.

Don't loan the IRS money for free, if they don't want to pay you back you're up sh*t creek.
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Its amazing how many people are happy to get a refund. I run a small business and always owe at the end of the year and people cringe when I say I need to write a large check for April. :confused:
 
I thought getting hacked and being irresponsible with people's information or money is only something evil corporations did and gov't was the answer.

I'm so shocked.
 
MrCrispy said:
Of course all this could be avoided and save everyone millions if the IRS adopted automatic tax returns on their website like most other sane countries have done. They already know everything they need to do the return.
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Yeah it's basically tax prep companies and the super rich who find tons of loopholes and deductions who keep that from happening. Would be really nice if it were like in other countries where it's done for you, and they sent it to you and ask if it's okay or you want to make any changes.
 
jpm100 said:
Then the government would loose a tool. One that is use to intimidate the public. Or use it to advantage favored groups and disadvantage unfavored groups. If that was automated, you couldn't hide that behind feigned indignation and 'failed' hard drives.
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exactly
 
mynamehere said:
The government will spend (our) dollars to recover dimes (probably more like pennies). And they expect interest when you owe them, and they ant they want their money NOW. When they owe you it's interest free and they're in no rush to get it to you. :mad:
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Do be fair when you do you owe money you have to deal with giving money to one entity (IRS), when the IRS owes money back they have to deal with millions of customers all at the same time.
 
panhead said:
Crooks just make up a W2. The IRS doesn't validate the W2 at the time the refund is made because their system lags; see

http://blogs.wsj.com/totalreturn/2015/02/17/quick-processing-of-tax-refunds-is-handy-for-fraudsters/
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Wow this is crazy, I always thought W2 information was digitally sent to the IRS or something, and then wondered why I had to attach my W2 form in the first place. So I could simply fabricate a W2 form, engineer it to show that the government took way more taxes than it should have, throw my address with someone else's name and SSN and I get mailed a check, and when the poor saps do their taxes at the last minute and send in information it mucks the system up?
 
I sympathize with anyone who's suffered from identity theft. I've seen it first-hand ... since my wife (a victim of both identity theft AND the IRS) is quoted in the article.

The most challenging part: proving her identity to the IRS. She had to send copies of her driver's license, birth certificate, previous tax returns, pay stubs, spouse's driver's license and birth certificate, marriage certificate, and utility bills with our current address so the IRS could confirm her identity. She sent them off with a signature confirmation. The paperwork was received and signed for at the IRS two days later.

Thirty days after that, we received a letter asking her to submit the same information to confirm her identity. They had no record of her previous paperwork being received. :mad:
 
Ur_Mom said:
Wow. 2 years later and people get their refund. They need to expand that PIN program to nationwide soon. Otherwise, it's going to keep getting worse. Sadly, if it was Anaheim, it's another thing that shows that SSN's shouldn't be used as identification numbers for anything and everything....
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If it's not your SSN it's another identification system either way the SSN was just a tool already there that they could use to track a person though govt files.
 
Semantics said:
If it's not your SSN it's another identification system either way the SSN was just a tool already there that they could use to track a person though govt files.
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Get my SSN. Every other personal identifying part can be found via public info or online. Then, you can basically have my life. It shouldn't be that easy. The PIN idea from the article sounds pretty good. SSN is used anywhere and everywhere. Without that PIN, it's worthless. That's something you know, and hopefully don't share with others.

The SSN just seems like the one part that can be exploited more than anything else. That's the one thing that's supposed to be 'secret'. But, it's just used in everything as that identification system. I can use my Bday and all that, but it's all public info. When someone gives their SSN, it's like they are 'verified' to be that person, regardless if it is or isn't.

Just seems like with all the leaks and everything, the SSN shouldn't have so much influence on things. A little late for a replacement, but utilizing the PIN sounds like a good idea.
 
And why doesn't the IRS just hold any refund that isn't going to the same address or bank account it went to last year? They should automatically put a hold on it until the information can be verified.

That would stop almost all this fraud, and not cause a problem with most people since most people don't move or change bank accounts every year.
 
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