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ID theft discovered at tax time

By KALEY CONNER

kconner@dailynews.net

Hays resident Lou Tinkel initially got good news after electronically filing his annual income tax return -- a refund was on the way. Unfortunately, bad news followed shortly afterward.

"(My accountant) called me and warned me I was going to have to mail everything in because my Social Security number had been compromised, which was a pretty big shock," Tinkel said.

Local accountants said it's not uncommon for residents to learn of identity theft during the spring ritual. They fill out their tax forms, submit them via Internet to the Internal Revenue Service, and soon discover the form was rejected because someone else has used their identification number.

Jamie Dreher, an accountant at Brungardt Hower Ward Elliott & Pfeifer, said it usually happens to at least one of her clients each year.

Victims of identity theft must file their tax returns by mail and fill out an identity theft affidavit provided by the IRS. The process might delay the arrival of refunds.

While it certainly complicates the tax process, Dreher said technology has made it easier to catch possible scams.

"That's one of the blessings and the curses of electronically filing, because this could have happened many years ago ... and no one would have known about it," she said. "Now you can get almost instantaneous knowledge of that because when the return is filed, it will get rejected by the IRS."

It's anybody's guess how the number becomes compromised -- it could be as simple as a numerical error on someone else's tax return, Dreher said.

It also could be a situation in which a scammer somehow obtains the number and files a fraudulent return, hoping for a refund. In any case, possible victims are urged to monitor their financial accounts and credit score for suspicious activity, she said.

Tamara Andre, owner of Andre Tax & Accounting, said she has seen this situation a few times this year.

"Basically, what they're doing is somehow they get their hands on a name, address and Social Security number, then they are filing returns, creating maybe false W2s to go with it ... then filing as early in the year as possible before everyone else gets their information in," she said. "The IRS has a system in place that catches some things."

With the business world becoming increasingly digital, computer hackers sometimes are able to steal confidential information from large companies, Ellis County Sheriff Ed Harbin said.

"There have been credit card companies hacked and people have taken sensitive information home and computers stolen out of cars or something along that line," Harbin said.

There are, however, several precautions residents can take to help keep their information secure. Important documents should be shredded before they are thrown away, and residents who have mail delivered to their doors should be sure bills are not left outside, he said.

"People have gone up and taken mail off people's porches and gotten (information) that way," Harbin said.

Residents also should be leery of phone calls and emails requesting personal information, or promises of rewards that sound too good to be true.

"There's tons of scams that go around. If they get a call they feel uncomfortable with, they should call law enforcement and let them check it out," Harbin said. "The main thing is use common sense; be careful. If it seems too good to be true, it probably is."

According to the IRS website, the number of criminal investigations into identity theft issues more than tripled in fiscal year 2012, jumping to 898 from the 276 investigations started in fiscal year 2011.