Actually it isn’t quite as bad as the cartoon implies. Tax ID fraud is going up — there were about 1.8 million tax-related ID thefts during 2012, but after a big hassle the victims are reimbursed. Typically they get their refund in about six months, but some are still waiting for refunds from 2011.
The trouble is e-filing makes it easy for criminals. The number of drug dealers in one area went down because it was so much easier and safer just to get money from the IRS. The IRS is taking the matter seriously and says it is taking corrective measures — using better filters, cooperating with financial institutions to prevent the theft of personal information and tracking down and prosecuting offenders. We’ll have to see how well it does.
In the meantime some advisors say the best protection is (1) to do our part to keep our personal data safe and (2) to file early and beat the crooks. Andy and I have decided not to do that second one. We’ll still file by certified mail on tax day and will hope for the best. If we do have problems I’ll write a few blog posts describing the process and we may or may not change our ways.
In a comment at Cheerful Monk tammy said the IRS probably hates her because she does her returns on paper. I figure you’re in good company, tammy. We don’t send sensitive information over the internet, and we don’t intend to start until the whole system seems a lot safer. If someone steals our identities we at least want to make sure it’s not our fault.
What about you? Do you do your own taxes? Do you file either early or late? Do you file electronically?