In its annual release in 2016, the Federal Trade Commission noted that reports of identity theft increased more than 47 percent from 2014 to 2015 (https://www.ftc.gov/news-events/press-releases/2016/03/ftc-releases-annual-summary-consumer-complaints) and that tax-related identity theft is a big part of this fraud. Identity theft has been the top category for frauds reported to the FTC for the past 15 years.

Identity Theft

Identity theft can take many forms. Thieves can obtain personal information (e.g., birth dates, Social Security numbers, bank and other financial accounts) to access financial accounts or use the personal information to establish accounts that are then used to make purchases or obtain loans for which the taxpayer may be on the hook. Almost half of all personal information is obtained from lost or stolen mobile devices: laptops, tablets, and smartphones.