Antitrust Law Daily Wrap Up, CONSUMER PROTECTION: FTC complaints of tax ID theft dominate 2014, (Jan 26, 2015)

By Dan Selcke, J.D.

In 2014, the FTC received more complaints about tax ID theft than about any other kind of ID theft, while reports about criminals impersonating IRS officials were up more than 2,300% over 2013, the FTC said in an announcement today. The agency encouraged consumers to take advantage of the informational programs available as part of Tax Identity Theft Awareness Week so they could guard against these scams.

Last year, the FTC got a total of 109,063 complaints about tax ID theft, accounting for 32.8% of the total 332,646 complaints about ID theft overall. It was the fifth year in a row during which these kinds of complaints topped the list. Typically, tax ID theft occurs when a scammer files a fraudulent tax return using a consumer’s Social Security number in hopes of getting a refund.

Meanwhile, complaints about IRS impersonation scams clocked in at 54,690 for 2014, up from just 2,545 in 2013. This enormous jump indicates that scammers are doing this to consumers across the country. Criminals who impersonate IRS agents usually call consumers on the phone, claim that they owe the IRS money, and suggest that they pay it with a wire transfer or by loading money on a pre-paid debit card. Often, they will threaten the consumers with arrest or legal action, and may even arrange for their calls to appear to originate in Washington, D.C. or recite some of the consumer’s Social Security number to lend credibility to their claims.

The FTC advised, however, that consumers could fight back against these schemes. In the case of IRS impersonators, the best defense is knowledge. IRS agents never call consumers about unpaid taxes or penalties—the agency typically sends letters—and if a call is received the consumer should never send money. To avoid tax ID theft, consumers should file their taxes early to get ahead of potential scammers. The announcement also included websites and numbers consumers could use to report scams if they find themselves a victim of one.

Finally, the FTC urged consumers to educate themselves about these issues through a number of online forums being held in honor of Tax Identify Theft Awareness Week, which begins today and runs through January 30. They include a webinar to be co-hosted on January 27 by the Treasury Inspector General for Tax Administration and AARP (The American Association of Retired Persons), and a Twitter chat about tax ID theft to be held on January 29. More information on these subjects can be found at the FTC’s Tax Identity Theft Awareness Week webpage.

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