Tax and Government Fraud Cases Spiked 68% in 2022

Rhea-AI Summary

Allstate Identity Protection has reported a significant increase in tax and government fraud cases, with a 68% rise in 2022 compared to 2021. Tax refund fraud ranked as the third most common fraud type, with the IRS flagging $5.7 billion in fraudulent claims and nearly 8 million suspicious activities reported. The company advises taxpayers to be vigilant against identity theft, especially during tax season. Five warning signs have been outlined, including issues with tax filings and unexpected IRS notifications. Allstate emphasizes the importance of safeguarding Social Security numbers and offers identity protection services to mitigate risks.

Positive

• Reported a 68% increase in cases of tax and government fraud, showcasing the company's relevance in addressing fraud prevention.
• Allstate Identity Protection offers reimbursement for out-of-pocket costs related to tax fraud, enhancing its service value.

Negative

• The IRS flagged $5.7 billion in tax fraud in 2022, indicating a widespread issue that could impact customer trust.
• Nearly 8 million reports of suspicious activities suggest serious vulnerabilities in taxpayer identity security.

Allstate Identity Protection shares warning signs and how to protect yourself

NORTHBOOK, Ill.--(BUSINESS WIRE)-- Taxpayers may get lower refunds this year, but that’s not stopping scammers from trying to steal them.

Allstate Identity Protection is reporting a 68% spike in tax and government fraud cases in 2022 over 2021. In fact, tax refund fraud was the third most reported fraud type in 2022, according to the Allstate Identity Protection Fraud in Focus report.

“We get a lot of calls about identity theft every year during tax season,” said Dustin Hofstein, Chief Service Officer at Allstate Identity Protection. “Refunds are stolen when a scammer uses your Social Security number to file a tax return. Unfortunately, people often don’t know they’re a victim of tax fraud until they file their taxes, which is why we advise filing as early as possible.”

The IRS flagged $5.7 billion in tax fraud in 2022, and there were nearly 8 million reports of suspicious tax-season activities.

Allstate Identity Protection is reminding people to be diligent and act on warning signs early to keep their identity and money safe.

5 warning signs of tax identity theft

1. You file your taxes and they’re declined. This is a sign a scammer has already used your Social Security number to file a phony tax return. As a result, the IRS can’t accept your electronic or paper return.
2. IRS records don't have your correct employment history or wages.
3. The IRS notifies you about an additional tax or refund offset you weren’t expecting.
4. You get a letter from the IRS saying your online account has been deactivated.
5. You’ve been assigned an employer identification number you didn’t request.

“One of the best ways to protect yourself is to safeguard your Social Security number,” Hofstein said. “Never keep your Social Security card in your car, wallet or purse, and be careful sharing your number, even when asked.”

Consider signing up for an identity protection service for extra peace of mind. Allstate Identity Protection reimburses out-of-pocket costs for various types of fraud, including stolen tax refunds.

To learn more about 2023 fraud predictions and the most prevalent scams of 2022, check out Identity Fraud in Focus, the Allstate Identity Protection quarterly report. It includes insights from millions of identity theft cases to keep families safer online.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005184/en/

Jessica Porter

jessica.porter@allstate.com

Source: The Allstate Corporation

FAQ

What did Allstate Identity Protection report about tax fraud in 2022?

Allstate Identity Protection reported a 68% increase in tax and government fraud cases in 2022 compared to 2021.

How much tax fraud did the IRS flag in 2022?

The IRS flagged $5.7 billion in tax fraud in 2022.

What are the warning signs of tax identity theft according to Allstate?

Warning signs include declined tax filings, incorrect employment history, unexpected IRS notifications, account deactivation letters, and unrequested employer identification numbers.

How can taxpayers protect themselves from identity theft?

Taxpayers are advised to file early and safeguard their Social Security numbers to prevent identity fraud.

What services does Allstate Identity Protection offer?

Allstate Identity Protection offers reimbursement for out-of-pocket costs related to fraud and provides identity protection services.