It’s Almost Tax Day: Do You Know Where Your Identity Is?
Erika Morphy

If you haven’t yet filed your 2007 income tax return, you may want to brace yourself for something even worse than finding out you owe the government money. You may find that the IRS has already accepted a filing in your name and paid out a hefty refund to someone else — someone who has gained possession of your identity and may use it for far more nefarious purposes than bilking the government.

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Spending your tax refund before it arrives? You might want to rethink that plan — and not just because it’s fiscally imprudent. There is a growing chance that this tax season you’ll learn for the first time that you were the victim of identity theft at some point during the last year.

A disturbing trend has surfaced: Many U.S. taxpayers are attempting to file their income tax forms only to find that they have already been filed by someone else purporting to be them.

During 2005 and 2006, the Federal Trade Commission Latest News about Federal Trade Commission received 92,570 taxpayer complaints related to employment-related and tax fraud identity theft, according to a recent report from the U.S. Treasury Department.

What’s even more troubling is that identity theft related to tax administration rarely is prosecuted. In 2005, only 45 cases were recommended for prosecution that included a charge of identity theft. In 2006, only 55 cases included that charge.

Taxpayers shouldn’t expect the IRS to play police, the report cautions: “IRS officials informed us that the IRS is unable to do more to stop continued use of someone’s identity in employment-related identity theft cases. The IRS does not have sufficient enforcement resources to address most of these cases. Moreover, they believe that employment-related identity theft cases are not the responsibility of the IRS and that it would not be worthwhile to pursue employment-related identity theft cases for unreported tax liabilities because the taxes owed on most of these cases are not significant.â€