Taxing Definitions

Definitions — Double Trouble

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Image source: Galiaoffri [GFDL (http://www.gnu.org/copyleft/fdl.html), via Wikimedia Commons
Image source: Galiaoffri [GFDL (http://www.gnu.org/copyleft/fdl.html), via Wikimedia Commons
Depending on which myth you choose to believe, your double is roaming the world searching for you, either with a desire to complete you or to do you evil. In today’s world, the myth is real, the story is skewed toward evil, and your double is an identity thief.

Think that conclusion is a bit pessimistic? Here’s a look at recent tax-related identity theft statistics, courtesy of the current IRS commissioner. Through the first nine months of 2016, 237,750 people filed affidavits with the IRS to report they were victims of identity theft, and the IRS says it stopped more than $4 billion in fraudulent refunds claimed by identity thieves on 787,000 tax returns.

How familiar are you with what the IRS is doing to counter tax-related identity theft? Here are a few questions to test your knowledge.

1.

Did the number of people filing identity theft affidavits with the IRS during the first nine months of 2016, as mentioned above, rise 50% or fall 50% from the same period in 2015?

 

or

 

2.

According to the Network Branded Prepaid Card Association, the federal government receives an identity theft complaint every two minutes. True or false?

or

 

3.

According to the Federal Trade Commission Consumer Sentinel Network, in 2015, which state ranked #1 for number of identity theft complaints (all identity theft, not only tax-related)?

or

 

4.

According to the IRS website, the typical identity theft case can take 120 days to resolve. The National Taxpayer Advocate arrived at a different number. How many days does the National Taxpayer Advocate say the IRS takes to resolve identity theft cases?

or

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Note: This information should not be considered legal, investment, or tax advice. Taxing Lessons and Top Drawer Ink Corp. do not provide legal, investment, or tax advice. Always consult your legal, investment, and/or tax advisor regarding your personal situation.

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Sorry, wrong answer :(
Right answer!

Per prepared remarks of the IRS commissioner on November 3, 2016: Through the first nine months of 2016, the number is down by more than 50%. There were 512,278 affidavits a year ago, and that’s fallen to 237,750. That means about 275,000 fewer taxpayer victims than a year ago.

Right answer!

True. Note this includes all identity theft, not only tax-related. Source: the Network Branded Prepaid Card Association website.

Sorry, wrong answer :(
Sorry, wrong answer :(
Right answer!

Source: Insurance Information Institute website.

Right answer!

From the Taxpayer Advocate 2014 Identity Theft Case Review: In this case review, we looked at IDT case cycle time from the taxpayer’s perspective—from the date of initial contact with the IRS by an IDT victim to the date the IRS issued a refund, if applicable, or completed the account adjustments. As a result, the cycle time computed in our review is significantly different than the cycle time reported by the IRS. The average cycle time for the IDT cases in our sample was 179 days (six months), with a median case cycle time of 105 days (approximately 3-½ months). We believe this measure more accurately indicates how long the IRS takes to resolve IDT cases.

Some IDT modules in our review were closed out by the function even though not all appropriate actions were taken. Furthermore, this 179-day measure is just for one module impacting one year and may only represent part of the victim’s IDT-related tax issues. As a result, the average cycle time of 179 days is understated.

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