re: IRS is holding your money for ransom....

There is a tremendous amount of tax refund fraud due to gaps in the system. And its not limited to the IRS. It is so easy to pull off, that many drug dealers have turned to this because it is safer, easier, and the post office delivers their fraudulent checks to their filing address.

First, the IRS is somewhat of an accomplice in this fraud because they don't have adequate safeguards and controls to detect and stop the theft.

Here is how easy it is:

1. Fraudster files tax return using a stolen or in some cases a "purchased" SSN.
2. Fraudster file return using the SSN as a fictious spouse or dependent and takes personal exemption of $6K or $12K if filing joint return. The return is rigged so that the filer gets a relatively large refund.
3. Fraudster files electronically and soon after 1st of year.

Now here is where IRS fricks us all.

The IRS, for most returns filed electronically, simply issues the refund to the filer, without checking the validity of the SSNs on form or sources of income. The return does not get flagged until the real owner of the stolen SSN files. Then an investigation is triggered and it can take up to 6 months for the innocent filer to get his or her refund.

How bad is this problem? Over $17 billion in fraudulent claims have been filed in past 2 years. How do I know this? Because I was a victim in 2013. Didn't get my refund until September 2014. Researched the subject and gave presentation at work.

It doesn't stop there. There crooked "data miners" who hack companies to get the stolen SSNs, & sell the data to legit individuals and businesses everyday. Its a huge problem. One of the purchasers of stolen data was Experian. Their lack of due diligence allowed them to purchase stolen data and and resell it to clients. This happened until FBI showed up. The thief was in Viet Nam and setup a fake company and duped Experian.