Identity Theft and the New Tax Bill

Will Congress Overhaul Credit Reporting Laws?

The 2017 filing season could be the worst yet for tax-related crime. With widespread confusion about the new tax law, IRS budget cuts, and a record-breaking year for data compromises, there’s an opening for fraud that should be serious cause for alarm, but doesn’t seem to be.

The bottom line: you should be concerned.

Last tax year, the IRS stopped 787,000 confirmed identity theft returns, totaling more than $4 billion. For the same nine-month period in 2015, the IRS stopped 1.2 million confirmed identity theft returns, totaling about $7.2 billion. There were many other widely reported wins. But what did not get reported was how much money scammers stole. Given the IRS’s estimate that 2016 would see a loss of $21 billion via fraud, one wonders.

That was then. The compromise of 143 million people in the Equifax breach changed all that. It included Social Security numbers—compromised SSNs being the most common “pre-existing condition” of crimes committed against the U.S. Treasury, and as such that breach poses a significantly increased threat difference over previous years.

We’re looking at a far more significant threat of tax-related fraud in the 2017 filing season than ever before. Compounding this situation, the IRS is less able to fend off the threat of identity-related tax fraud than it was last year.


I know it’s risky to publicly sympathize with the nation’s most hated federal agency, but I can’t imagine it’s been much fun to work at the Internal Revenue Service since Congress passed its new tax bill (note that I’m not suggesting there was ever a time I could imagine it might be fun to work at the IRS).

With the new tax year just begun, the agency is racing to find real-world applications for the numerous changes to the tax code conceived in the hothouse of Congress, where ideas do not always (or perhaps even very often) jibe with real life, and the daily concerns of actual Americans has more the feel of an annoyance than a matter of, say, central importance.

There are significant logistical challenges posed by the new tax bill. First order of business is getting the changes in place that need to be implemented now, for instance the coding to adjust withholding, which the IRS hopes will make its first appearance on pay stubs as early as February. There are other provisions that affect the here-and-now, like the new trigger for healthcare deductions, as well as a decent-sized punch list of smaller changes—all of which needing the immediate attention of a greatly diminished staff in the coming months.


Remember those cuts back in 2010? The agency was denuded of $900 million, which led to the loss of 21,000 jobs. That’s a major problem right now.

The last time there was tax overhaul like the current one, “Walk Like an Egyptian” was on the radio and cable TV was just finding its way into the suburbs. Today, Twitter feeds are reloaded continually, and late-show hosts joke about the size of the presidential button.

In 1986, the IRS got a budget increase to accomplish the increased workload, but this time around, “the House and Senate appropriations bills for 2018 would cut the IRS budget by an additional $155 million and $124 million, respectively,” according to the National Treasury Employees Union.

What You Can Do

Wait times were more than an hour last year. The helpline matters because people don’t read tax bills, or even news stories about them. The questions will be many—far more than usual. They will be on a host of topics. People will call in reaction to good, bad and neutral information.

Is there nothing to worry about till this time next year? Do I need to fill out a new W4? Is my tax bracket the same?

The only question that matters is this one: What’s the best way to avoid becoming a victim of tax-related fraud. The answer: file your tax return as soon as you have all the necessary documents to get the job done.

While it’s important to sort out what’s what with regard to the coming changes in our nation’s tax code, it’s crucial to take a look at the simple fact that people are confused, and that creates a beneficial state for fraud to flourish.

For time being, the only “solution” is beating scammers to the punch.

With everything that the IRS needs to do to function well, budgetary issues necessarily come to the fore. We should all be voicing concern about the agency’s ability to safeguard taxpayers from refund fraud given the current situation. And we should all be doing everything we can to protect ourselves in a hostile environment.

If you’re concerned about your credit, you can check your three credit reports for free once a year. To track your credit more regularly,’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.


Image iStock

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10 Ways Divorce can Affect your Credit


As nearly half of the American population already knows, divorce is a difficult, emotional process to go through. This difficulty can be compounded depending on the number of years a couple has been together, the dollar amount of their acquired assets, and whether or not they have any children.

Divorce can also have an impact on your credit, though the proceedings themselves are not the reason for this. In other words, couples shouldn’t expect their credit scores to plummet the second they file for divorce. However, there are things that occur during divorce that can have a negative impact on credit. Here are 10 ways in which a divorce could affect your credit score:

  1. Having to refinance your home

    In order to move a property into one person’s name, it may be necessary to refinance your mortgage. As with any refinance situation, this will require a hard credit inquiry, and may also potentially add a great deal of new debt for one person.

  2. The splitting of the debt was uneven

    When assets are divided, one person may get to take more of the income, property, or assets, but also more of the debt. It all just depends on how the debt is divided.

  3. Going from two incomes to one

    If possible, it’s helpful to examine finances before a divorce and determine new budgets for both parties, so as to avoid falling behind on any bills or payments. Many divorced individuals report that losing another person’s income made the single greatest impact on them financially. Setting up a new budget early on can help avoid this issue.

  4. Not disclosing all debt during the proceedings

    At some point during the divorce process, both parties are required to disclose their financial accounts. However, as former spouses sometimes learn, not everyone is truthful about these assets. Running a credit report is the best way to ensure you’re aware of every account bearing your name.

  5. One party doesn’t pay his or her agreed-upon share

    Most courts are willing to work with couples to help them discuss and agree on a payment plan for shared assets, such as a home or any jointly-owned property.

  6. One party still has access to the other party’s accounts

    In the event that divorcing spouses do not split their joint accounts, both parties will still be responsible for any additional charges. It’s best to split any joint accounts as soon as possible.

  7. Credit limits are decreased

    Many creditors regularly check up on their clients to see if there has been a salary change, and most credit card agreements state that limits can be decreased at the creditor’s discretion. If one spouse was making more money than the other, and the accounts are separated, a credit card company can choose to lower the limits for one or both spouses. This can, in turn, affect credit scores, as well as catapult credit card holders to their maximum limits very quickly.

  8. The divorce turns ugly

    While no one enjoys going through divorce, the best solution is to try and remain civil to one another, lowering the risk of spouses doing financial harm to one another out of spite.

  9. There is confusion over the divorce decree

    People can often be confused about their financial responsibility as stated in the divorce decree. If you are unsure of where you stand or what you must pay, consult your attorney, family court facilitator, or mediator.

  10. Spouses don’t work together

    Sometimes, electric bills can be overlooked or go unpaid. Keeping the divorce process as amicable as possible helps parties communicate with one another over their shared financial responsibility after the households have been completely separated. Working together ensures everyone’s credit remains in good standing.


Image: iStock

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4 Things You Must Know About Money & the Military

Money might not seem like a priority when it comes to the military, but it plays a much bigger role than you might think.

A lot goes into managing your military career. Whether it’s meeting physical fitness standards or testing to make rank, you’re responsible for keeping everything on track. One area that’s necessary for a successful military career but doesn’t receive as much attention are your finances. When your finances are running smoothly, they don’t play a part in your military career, but when they’re not, then it is a problem for your job.

Knowing these four things about money and the military can keep your military career on track and help you avoid future financial problems.

1. Security Clearances & Your Finances

Many service members are required to have a security clearance for their job in the military. The Department of Defense uses a set of guidelines to determine a person’s eligibility for clearance. One of the 13 guidelines covers finances. It’s Guideline F, and it says, “An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Unexplained affluence is often linked to proceeds from financially profitable criminal acts.”

The guideline is saying when you’re in debt, you may be tempted to compromise information or technology you have access to in exchange for money. Guideline F doesn’t just apply to an initial application for clearance. It also applies to individuals being reinvestigated. This is where people serving can run into problems with their military career.

Reinvestigation can be at 5, 10 or 15 years after your initial clearance is obtained depending on if it’s top secret, secret or confidential. Losing your clearance can mean losing your job or being separated from the military if your job requires a security clearance. The F guideline says “a history of not meeting financial obligations” may be a disqualifying factor in obtaining a security clearance. If you’re in the habit of not paying your bills and have debt in collections you may be putting your military career in jeopardy. It’s important to pay your bills on time to keep your credit report and therefore your security clearance in good standing.

2. Government Travel Credit Card (GTCC)

In the course of your military service, you may be required to use a GTCC during a temporary duty for official expenses you incur for travel. The credit card is provided through the Government Travel Charge Card Program and has detailed regulations on its use. (To qualify you must have a qualifying credit score of at least 660. You can check two of your credit scores for free with Making a poor choice with this credit card can lead to serious problems in your military career.

Service members are required to sign a Statement of Understanding to ensure they know all directions from the DOD for the use of the credit card. One direction that gets military members in the most trouble is the requirement to file a travel voucher within five business days after completing their trip. By not submitting a travel voucher on time, your reimbursement will be late, and you will not have the funds you need to make the payment on your GTCC. If there are any unauthorized charges, they’ll be the cardholder’s responsibility, which will increase the amount of money you personally owe. It may be a credit card you can only use for official expenses, but it’s still in your name. The repercussions of a late payment start with notification to your leadership that you have not paid your bill. Once nonpayment hits 61 days, the card will be suspended. Not paying your GTCC can affect your personal credit or worse could cause you to be separated from the military. Use your GTCC for official expenses and pay the bill on time to avoid the GTCC affecting your credit or military career negatively.

3. The Thrift Savings Plan (TSP)

The TSP is similar to an employer 401K but for military personnel and government employees. It’s available to help them save money for retirement at a relatively low cost. One common mistake that can become a financial problem is if a person signed up for the TSP before Sept. 5, 2015, the money they contributed to the TSP was automatically invested into the Government Securities Investment Fund (G Fund), unless they selected otherwise. Many people never go back into their TSP account and change their investments.

The problem with that is, over a person’s 20-year military career the G Fund is at risk to earn less than inflation.To have a TSP account balance with low or no return comes as a shock to many nearing retirement. To avoid this mistake, review your TSP investment allocation to ensure you have investments selected that align with your risk tolerance.

4. The Savings Deposit Program (SDP)

Being in the military has its financial perks, and one of them is the SDP. This program allows members of the armed forces serving in a combat zone to save up to $10,000 on each deployment. The SDP earns up to 10% annually. It’s not a requirement to use, but it’s a great resource to help service members get ahead on their savings and improve their finances.

Once you’re in the combat zone 30 days, you can start the SDP with your finance office via cash, check or direct deposit. The limit you can deposit at one time is equivalent to the amount you earn in basic pay. For example, if you make $1,000 per month in basic pay, that is the max you can deposit at on time. If you earn $7,000 basic pay in a month, you can write a check to begin your SDP with $7,000 and then set up allotments each month to continuing saving until you return or reach $10,000. Building a surplus in savings prepares you for financial problems that may pop up in the future.

Image: Catherine Lane

This story is an Op/Ed contribution to and does not necessarily represent the views of the company or its partners.

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