As faculty and staff start receiving their W-2s and other tax documents, it is time to start thinking about filing income tax returns—early. This is also the season when identity thieves go into overdrive, attempting to file fraudulent tax returns. Tax fraud is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud. South Florida, already the leader in Medicare fraud, is also taking the lead in tax-identity theft. Florida has the highest rate of identity theft in the country, with 178 complaints per 100,000 residents in 2011. Tax-identity theft exploded to more than 1.1 million cases in 2011 from 51,700 in 2008.

Fraudulent tax returns can come in the form of tax-identity theft, refund fraud, or return-preparer fraud. With e-filing, evidence of fraud is difficult to find. There are no signed tax forms, envelopes or fingerprints, and e-filing promises quick refunds. For criminals to e-file in your name, they need your name and Social Security number, combined with a phony W-2 (wages) or fabricated Schedule C (business income). These ID thieves steal your personal information and then use it to file a fake tax return in your name, usually tweaking the numbers to get a large refund. The refund can be posted to an anonymous “Green Dot” prepaid Visa purchased at a drugstore, Wal-Mart, etc. The taxpayer whose ID has been stolen will not find out until he or she attempts to file the real return and then is informed by the IRS that the return has already been filed and the refund sent. That is the primary reason to file as early as possible, before a potential criminal attempts to do so on your behalf. To read the complete tip, including steps to protect your tax identity, please click here.