Although some insurance company executives say they are now using analytics, others say they’re still on the fence about it or only beginning to explore its possibilities.
Feb. 03--It's the time of the year in which millions of Americans sharpen their pencils, dig out their calculators and rifle their files for W-2 forms, bank statements and receipts.
It's also the time in which identity thieves try to intercept the personal information in documents taxpayers use to file their returns, with the aim of filing false tax forms and collecting bogus refunds from the Internal Revenue Service.
An IRS fact sheet on the issue indicates that as a result of the agency's "aggressive efforts to combat identity theft from 2011 through November 2013, the IRS has stopped 14.6 million suspicious returns, and protected ovr $50 billion in fraudulent refunds."
The IRS also says it started 1,492 criminal investigations of identity theft in fiscal 2013, a 66 percent increase from the previous fiscal year.
In a presentation to the University of Florida Accounting Conference last year, Valrie Chambers, an accounting professor at Texas A&M University-Corpus Christi, told conference attendees the Treasury Department reported more than 1.2 million cases of tax identity theft in 2012, up from 48,000 in 2008. Chambers added that Florida is among the U.S. states most heavily hit by the practice -- particularly in Miami and Tampa -- partly because of the state's large population of senior citizens, whom fraudsters have traditionally targeted.
Gary Fracassi, a certified public accountant in Orlando, said all taxpayers, regardless of age, need to be aware of their vulnerabilities at tax-filing season.
"What (identity thieves) have done is just made up fake W-2 forms to create fake income to get fake refunds," Fracassi said. "The whole idea is that once they have the Social Security number, it's pretty easy for them to file a tax return."
Fracassi, who is also a member of the board of governors of the Florida Institute of CPAs, said tax identity thieves are actually looking for three basic pieces of information: a name, a date of birth and a Social Security number.
That means securing any documents containing such information.
For example, taxpayers who don't get their W-2 earnings statements hand-delivered at the office or through a secured electronic network might want to ask their employer when the forms are to be mailed and, if possible, be waiting at the mailbox at their postal carrier's regular delivery time.
Likewise, since year-end statements from banks or brokerage houses often arrive by US Postal Service, this is an especially good time of the year to retrieve all postal mail from the box as soon as possible.
As for birthdates, Fracassi suggests taxpayers avoiding putting them on social media sites.
Taxpayers should also choose carefully if they are designating someone else to prepare their returns. Fracassi noted anyone can check the status of a Florida certified public accountant's license, along with any complaints against him or her, at http://www.myfloridalicense.com.
For those choosing to have other tax preparation services do their returns, Fracassi suggests taxpayers do their homework on the companies and ask each company for its Preparer Tax Identification Number, or PTIN, issued by the IRS.
Meanwhile, plenty of pitfalls await taxpayers online. In her Florida Accounting Conference presentation last year, Chambers told attendees that thieves have been known to create sophisticated websites mimicking those of the IRS and Federal Deposit Insurance Corp., as well as of financial institutions, in an attempt to obtain Social Security numbers and other personal information via the Internet.
Fracassi urges taxpayers to be extremely wary of sharing any data online, particularly through email.
"Everybody needs to know one thing, the IRS will never initiate contact with you using email," he said. "If you get an email from someone claiming to be the IRS, it's a scam. You should ignore it and possibly report it to the IRS. It's a phishing expedition to get your Social Security number and date of birth."
He also suggests taking care before filing a return online.
"There are some free sites that are out there," Fracassi said. "You need to think, 'How did I get there? Did I get there through the IRS website or did I just Google "free tax return software?" Is that a legitimate place for me to file my taxes?'"
Contact Richard Anguiano at 867-4104 or [email protected].
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