Report: Cybercriminals Bank Nearly $4 Billion On Tax Fraud

Attackers collect almost $4 billion by filing fraudulent tax returns, stealing taxpayer identities, ThreatMetrix report says

Cybercriminals netted nearly $4 billion last year by filing fraudulent tax returns and stealing taxpayers personal information, according to a report published Monday.
According to a
study posted by security vendor ThreatMetrix
, 93 percent of all potentially fraudulent tax returns are filed online.
Cybercriminals often file a return for a child, an adult whose income doesnt merit a return, or even a deceased person, ThreatMetrix states. A 2013 report by the Treasury Inspector General found the Internal Revenue Service (IRS) gave away nearly $4 billion in fraudulent tax refunds the previous year.
Many consumers also begin to file their tax returns only to find out that someone else illegally filed a return in their names, according to ThreatMetrix. Fraudsters often receive returns on prepaid cards, which are then turned into cash. The taxpayer is then left to report the crime to the IRS, file a proper return, and protecti their data and identity from fraudulent use.
After a legitimate user files his or her tax return online, cybercriminals can compromise the system and steal personally identifiable information, the report states. In the first half of 2013 alone, 1.6 million taxpayers were affected by identity theft.
Cybercriminals are increasingly using social networks to collect data about their victims -- such as marital status or number of children -- which helps them to file more accurate tax returns and increase the success of their fraud, ThreatMetrix notes. The IRSs launch of a new mobile app this year could also increase the rate of fraud, the report states.
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Report: Cybercriminals Bank Nearly $4 Billion On Tax Fraud