Rockford, Illinois News

Better Business Bureau warns public about tax ID theft

ROCKFORD — The Better Business Bureau is warning the public that the IRS tax-filing extension from April 15 to May 17 increases the probability of identity theft.

A recent Federal Trade Commission report shows that 1.4 million identity theft complaints were filed in 2020, nearly double the number filed in 2019. And for that reason, the Better BBB says extreme caution should be top of mind for all taxpayers.

Tax identity theft occurs when someone uses a stolen Social Security Number to file a phony tax return and collect the refund. IRS imposters are scammers who pretend to be calling from the IRS.

“The imposters use a two-pronged attack,” said Dennis Horton, director of the Better Business Bureau’s Rockford Regional Office. “First, they’ll claim you owe back taxes and must pay up immediately. That’s the initial grab for your money. Second, they’ll need your SSN to help get this all cleared up. That’s the key to filing a false tax return and beating you to your tax refund.”

More often than not, victims of IRS imposters don’t find out they’ve been scammed until they file their taxes and it’s rejected as a duplicate return.

“Last year’s average tax refund was more than $2,500,” Horton said. “More than 150 million returns are expected to be filed this year. If the thieves and scammers are able to capture just a fraction of those dollars, they’ll get a big payoff.”

Horton says taxpayers must be proactive to avoid being victimized. Safeguards include protecting Social Security numbers throughout the year, never giving it out unless there’s a good reason and it the person requesting it is trusted. Horton recommends that tax returns should be filed as early as possible and that those who file electronically do so from a secure connection. Tax returns filed by mail should be mailed directed to the IRS from a post office.