On May 15, the House passed a bill which provides a second round of stimulus checks. The bill has now been passed to the Senate. Although the Senate has claimed the bill was ‘dead on arrival’, all signals are that the Senate will indeed negotiate with the House to put together a bill they will both agree to pass.
This second stimulus check would be for the same amount as the first: $1,200 for individuals, and $2,400 for married couples filing joint tax returns. Unlike the first stimulus check, children (up to three) would also receive the $1,200, as opposed to the $500 given in the first round of stimulus checks.
However, a big problem has come to light following the first round of stimulus checks. The Internal Revenue Service’s (IRS) new site to collect bank account information is not as secure as it should be. Most Americans who are eligible for payments had their funds direct-deposited into the same bank accounts listed on their previous tax filings. But for those who do not usually file a tax return, there is a real risk that fraudsters will snag non-filers payments from the new IRS site before they have a chance to claim them.
Millions of U.S. residents, including low-income workers, certain veterans and individuals with disabilities, are not required to file a tax return. Even so, they are still eligible to receive at least a $1,200 stimulus payment. The new IRS website asks these individuals to provide their bank account information in order to receive direct deposits. And there lies the massive security problem. While the application on the site does ask for a phone number to verify that text messages can be received at that number, the rest of the identity checks appear to be optional.
In addition to the identification requirements being incredibly lax, tax refund fraud has been a huge problem over the past few years. According to data from Risk Based Security, there were 7,098 data breaches in 2019 that exposed 15.1 billion records.
“The IRS is asking consumers for their mailing addresses, email addresses – it’s all appropriate information,” explained Rivka Little, senior vice president of marketing and strategy at Socure.
“But all of those points of data are out there; they’re already breached and attainable,” she said.
Each year, scam artists also file phony tax refund requests on millions of Americans, whether or not the impersonated taxpayer is really due a refund. With so many bits and pieces of personal information available today thanks to the internet and social media, the task of grabbing the information to accomplish this is shockingly easy. Social media alone offers birthday, full name, email address and other details. In many cases, the targeted individual is only made aware of what has happened when their tax return is rejected because it has already been filed by scammers.
In the end, much depends on how effective the IRS’ efforts are in spotting and handling phony applications.With the enormous pressure the agency is currently under to disburse the stimulus payments as fast as possible, it seems probable that some Americans will fall victimto fraudsters.
Author Bio:Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated chargeback insurance providers in the nation. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.
