Falling victim to ID theft during tax season

February 6, 2012 3:37:50 PM PST
If you get an unexpected tax refund in the mail, you may want to hold off on cashing the check, especially if you haven't even filed your taxes yet.

It may sound crazy, but that is exactly what happened to a Deer Park man.

It appears someone used the man's name to file a fraudulent return. The first sign of trouble? An unexpected refund check.

Henry French got a big surprise in the mail last week.

"Found a check made out to me for $6,830.78 from a bank I have never heard of, so I got suspicious," he said.

French said the check is from a tax preparation company. The only problem is that French has never heard of company and has not filed a return.

"I have never received that kind of refund, and I am suspicious of things I am not looking for," French said.

It turns out the check is the real thing, sent from the Santa Barbara Tax Products Group. It is a refund anticipation loan.

The company said French got the check because someone else apparently used his name to file a fake return using online tax preparation.

According to the company, French got the check instead because the company suspected fraud and decided to send the money to the last known address of Henry French instead of the address listed on the return.

The company said this is likely a case of identity theft.

"It was enough to make me mad a little and look for someone like yourself to send this to," French told us.

While it may sound unusual, tax preparers have seen exactly this kind of fraud before, and they tell us it is becoming more prevalent.

"It comes as a shock," Houston CPA Bob Martin said. "I had a client last October. The couple filed their taxes and the IRS sent a notice saying the wife had already filed as a single person and it was a different address."

Martin and IRS officials both suggest that French call the IRS and alert them to the potential ID theft.

Martin also said that if there is a problem, it could take months to fix.

"We contacted the IRS and they are looking into it and it is not resolved yet, but what they did do is put a freeze on the account. Nothing can go in and nothing can go out, but it is a rather frustrating experience," Martin said.

The IRS says taxpayers can call their Identity Protection Specialized Unit at 1-800-908-4490 if they are victims of ID theft. There are also special forms to fill out. All of them are available at www.irs.gov.

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