Tax Identity Theft

- (NBC News) Identity thieves have found a weakness in the IRS's tax return procedure.

They know that returns filed electronically don't immediately require the all-important w-2.

"When you file your tax return online, you don't have to actually file your w-2 electronically. So, they can make up the payroll information in order to get a tax refund in your name," said Maneesha Mithal, of the division of privacy and identity protection.

That's why the tax refund you'll soon be filing for with the IRS has become such a popular target of identity thieves.

Identity Protection specialists at the Federal Trade Commission say in the last two years, stealing someone's tax identity has become the fastest growing form of I.D. theft.

It all starts with a thief getting your social security number somehow, then filling out online the phony info on wages.

It leads to, what privacy experts call, a near hopeless situation. 

"The truth is if an identity thief has your number and your address, and they're clever, you very well could be a victim and there's not much you can do to prevent it," said privacy expert Bob Sullivan.

That's why the FTC is launching a campaign this week, urging consumers to protect their social security numbers, and also to act quickly on doing taxes this year.
"If you get a jump on the identity thief by filing your tax return first, you can get your refund first," said Mithal.

The IRS has added staff to help, but only after a tax filer figures out they're a victim.

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