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ASK THE CALIFORNIA EMPLOYMENT TAX AND PAYROLL TAX ATTORNEY – NEW SOCIAL SECURITY SCAM, BUT THE IRS IS MAKING HEADWAY IN COMBATING IDENTITY THEFT

By Robert S. Schriebman
2019

Introduction

You may soon be on the receiving end of the latest Social Security identity theft scam. The caller identifies himself as an employee of the Social Security Administration. He is calling because, "suspicious activity regarding your Social Security number has caused us to suspend your Social Security number." You are then instructed to "press 1" for further information. If you follow their instructions you will be on the road to identity theft disaster. This is the latest scam designed to steal your social security number and other personal information. Don’t fall for. Hang up and report the identity theft to the Social Security Administration or the IRS on its website.

These scams are not only in English but in other languages such as Mandarin.

Recently Charles "Chuck" Rettig, the IRS Commissioner, informed the Security Summit partners that identity thieves are often members of very sophisticated criminal organizations based in the US and abroad. They have the resources and the technology skills to reinvent themselves with new scams. This war on identity theft is just beginning.

Identity theft incidents continue to increase. The number of business tax related reported incidents increased by 10% in 2018 with 2450 incidents reported. This is according to the latest IRS press release IR-2019-66 (April 9, 2019).

The IRS Has Made Great Headway in Combating Identity Theft

The IRS and its Security Summit partners have been working continuously since 2015 to fight identity theft and to protect your right to a tax refund. They established the Identity Theft Tax Refund Fraud Information Sharing and Analysis Center (IDTTRF-ISAC) to detect and prevent tax refund fraud. There are currently 65 groups that are members of the Security Summit partners.

According to the latest IRS press release, IR-2019-66, the following encouraging results were announced.

  • Between 2015 and 2018, the number of taxpayers reporting they were identity theft victims fell 71 %.
    Back in 2015, the IRS received 677,000 identity theft complaints. In 2018 they only received 199,000. But just think of all the money the hackers made taking our tax dollars! This is why identity thefts continue – they are profitable.
  • Between 2015 and 2018, the number of confirmed identity theft returns stopped by the IRS declined by 54 %.
    In 2018, 9% more identity thefts were reported than in 2017. The good news is that this number is much lower than the 1.4 million in 2015. But the 2018 increase must give us pause.
  • Between 2015 and 2018, the IRS protected a combined $24 billion in fraudulent refunds by stopping the confirmed identity theft returns.
    In 2018, thieves obtained $3.1 billion in phony refunds. No wonder they continue in inventing new ways to steal our money.
  • Between 2015 and 2018, financial industry partners recovered an additional $1.4 billion in fraudulent refunds.
    While this number is encouraging, hackers are still getting away with murder. This statistic reflects the fact that fewer fraudulent tax returns entered the system, but we have a long way to go.

Conclusion

Progress is being made against identity theft and against tax refund theft at both the IRS and FTB levels. However, the number of business tax related identity theft increased by 10% in 2018. Thieves file fraudulent tax returns. They use stolen EINs to create phony W2s. Thieves have been known to impersonate business personnel who convince payroll employees to disclose W2 information or make wire transfers. Not only businesses are vulnerable, but estates and trusts are also at risk.

You must be aware of the latest Social Security scam that informs you that there is "suspicious activity" associated with your Social Security number. The calls are robotic, but it will not take long for the scammers to have real people call you. Don’t fall for it. Make an appointment with your local office of the Social Security Administration and discuss the call with them. You will be glad you did. The Social Security Administration needs your input.

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Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments. Mr. Schriebman is in private practice. He is not affiliated in any way with the EDD and he is not employed by the EDD or any other agency of the State of California.

Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures – A Manual for Practitioners" published by Commerce Clearing House.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, "IRS Tax Collection Procedures – A Manual for Practitioners" published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See "California Tax Collection Practice and Procedures" and "California Taxation Practice and Procedure," both published by Commerce Clearing House.

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