Does E-filing Taxes Lead to Increase in Identity Theft?

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E-filing your tax returns has many advantages like speedier tax refunds. Over the last few years, there has been a surge in the percentage of taxpayers who e-file their tax returns. Last year, a total of 71% of American taxpayers used the e-filing system to submit their tax returns. At the same time, there has also been a massive increase in the number of identity thefts in relation to taxes. The number of tax-related identity theft incidents has increased fivefold, from about 50,000 in 2008 to nearly 250,000 in 2010, out of about 140 million returns. Are the two increases linked?

According to IRS Commissioner Doug Shulman, the two increases have happened by coincidence and there is no evidence of them being linked. In statements made by Shulman to the House Oversight and Government Reform Committee’s panel on financial management, he said that e-filers are required to submit all the same information as paper filers but that does not mean it is more difficult for identity theft to occur because of the physical forms used by paper filers. The identity thieves would simply claim to have lost their forms. Furthermore, the fraudsters can receive refunds just as quickly as e-filers by submitting paper returns by overnight mail.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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