The state is taking an extra step to curb identity theft at tax time this year: Mainers will have the new option of listing their driver’s license numbers on their income tax return to help prove they are who they say they are.
Providing the information is voluntary. If a tax return is flagged for containing suspicious information — potentially someone claiming to be someone else — the state will use the license number to confirm the taxpayer’s identity
“It’s certainly an option that taxpayers can consider that helps,” said David Heidrich, spokesman for Maine Revenue Services.
Fraudulent tax returns are not new. For decades, scam artists have submitted state and federal tax returns using fake names and Social Security numbers.
But scammers are increasingly using stolen identities. Their returns contain real names tied to real Social Security numbers, and in some cases, real employers or other accurate information. That makes fraudulent returns more difficult to detect.
Tax-return identity theft is an increasing problem in Maine and around the country.
The IRS reported just over 440,000 identity theft incidents in 2010, according to the treasury inspector general for Tax Administration. By 2013, that number had jumped to 2.9 million.
Last year, by the height of tax season, Maine had received 1,600 fraudulent income tax returns from people claiming the identity of someone else — putting the state on pace to double 2014’s number.
Maine isn’t alone in its efforts to curb ID theft this year. The IRS, states and members of the tax industry have been working together for months on ways to protect taxpayers and better authenticate returns. Many of the new safeguards will be invisible to people filing their taxes, including the sharing and analyzing of data among the IRS, states and the tax industry to help spot fraudulent returns.
However, electronic filers likely will notice that tax software and online tax programs have new password and security requirements and, like the state, will give people the option of providing their driver’s license number to confirm their identity.
In Maine, 82 percent of taxpayers filed their returns electronically in 2015.
Experts urge taxpayers to file both their federal and state returns as early as possible, before scammers can file first. They also say taxpayers should alert all tax agencies — state and federal — if they believe their identity has been stolen or they’ve been the victim of tax-return ID theft.
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