How IRS Protects ID Thieves
Millions of Americans have fallen victim to ID theft during tax season, when fraudsters file false returns in an attempt to steal other people’s refunds.
Victims face delays in getting their real refunds, and paperwork nightmares that can drag on for months. In an attempt to survey the damage, some have asked the IRS for a copy of the fake returns, but Bloomberg reports that the agency has denied such requests, despite consumer-protection regulations intended to help victims in these situations.
The rules protecting consumers apparently conflict with tax laws that prevent its agents from sharing bogus returns and impose a penalty of up to five years in prison and a $250,000 fine for IRS workers who violate that law. “Employees face the specter of felony charges for giving out private details — including, possibly, those of the identity thieves — to those who aren’t authorized,” according to Bloomberg.
Related: 3 Costly and Common Tax Scams to Avoid
Tax refund fraud has ballooned in recent years. While electronic filing has made the tedious process of filing taxes more bearable for consumers, it has also made it easier for criminals to scam the system by filing phony returns using stolen Social Security numbers. Scammers bilked the IRS out of $5.8 billion in fraudulent tax refunds in 2013, a number auditors expected would climb much higher in the most recent tax season. (Numbers haven’t yet been released for 2014 returns).
Electronic fraud became such a problem this year that TurboTax briefly suspended state returns for customers in February to deal with ID theft issues.
If the IRS is of limited help to victims, that’s all the more reason to make sure your information is protected. You can find some tips to reduce your risk of ID theft here.
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Chart of the Day: SALT in the GOP’s Wounds
The stark and growing divide between urban/suburban and rural districts was one big story in this year’s election results, with Democrats gaining seats in the House as a result of their success in suburban areas. The GOP tax law may have helped drive that trend, Yahoo Finance’s Brian Cheung notes.
The new tax law capped the amount of state and local tax deductions Americans can claim in their federal filings at $10,000. Congressional seats for nine of the top 25 districts where residents claim those SALT deductions were held by Republicans heading into Election Day. Six of the nine flipped to the Democrats in last week’s midterms.
Chart of the Day: Big Pharma's Big Profits
Ten companies, including nine pharmaceutical giants, accounted for half of the health care industry's $50 billion in worldwide profits in the third quarter of 2018, according to an analysis by Axios’s Bob Herman. Drug companies generated 23 percent of the industry’s $636 billion in revenue — and 63 percent of the total profits. “Americans spend a lot more money on hospital and physician care than prescription drugs, but pharmaceutical companies pocket a lot more than other parts of the industry,” Herman writes.
Chart of the Day: Infrastructure Spending Over 60 Years
Federal, state and local governments spent about $441 billion on infrastructure in 2017, with the money going toward highways, mass transit and rail, aviation, water transportation, water resources and water utilities. Measured as a percentage of GDP, total spending is a bit lower than it was 50 years ago. For more details, see this new report from the Congressional Budget Office.
Number of the Day: $3.3 Billion
The GOP tax cuts have provided a significant earnings boost for the big U.S. banks so far this year. Changes in the tax code “saved the nation’s six biggest banks $3.3 billion in the third quarter alone,” according to a Bloomberg report Thursday. The data is drawn from earnings reports from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.
Clarifying the Drop in Obamacare Premiums
We told you Thursday about the Trump administration’s announcement that average premiums for benchmark Obamacare plans will fall 1.5 percent next year, but analyst Charles Gaba says the story is a bit more complicated. According to Gaba’s calculations, average premiums for all individual health plans will rise next year by 3.1 percent.
The difference between the two figures is produced by two very different datasets. The Trump administration included only the second-lowest-cost Silver plans in 39 states in its analysis, while Gaba examined all individual plans sold in all 50 states.