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.


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5 Ways Your Money Could Be Affected By a Ted Cruz Presidency


We’re still a ways from knowing who will be the next President of the United States, but Sen. Ted Cruz (R-Texas) is among the top contenders. As such, you may want to know a little more about him and, specifically, how some of his policy proposals would affect your finances.

Whether Cruz or any other potential president will accomplish the goals outlined in their campaigns is a huge unknown; regardless, they’re helpful to review as the election gets underway. We’re putting together these summaries for all the frontrunners, and we’ve already published pieces on how a Donald Trump or Sen. Bernie Sanders presidency could affect your money. Here are some changes you might experience if Cruz wins on election day.

1. Health Care Reform

Cruz wants to repeal “every word of Obamacare,” according to his website. That would eliminate things like requirements that all Americans have health insurance (or face a penalty) and insurers cover people with pre-existing conditions (among many other things the law specifies). Depending on your personal insurance situation, that could help you save money or it could cost you more. It all really depends on how Cruz plans on enacting reforms to “make health care personal, portable, and affordable.” In short, a President Cruz would want to change the way we pay for health care.

2. A Smaller Government

Cruz proposes eliminating the Internal Revenue Service, the Department of Education, the Department of Energy, the Department of Commerce and the Department of Housing and Urban Development (HUD). He calls it his Five for Freedom plan.

If you rely on any of those departments for anything — say, you want to buy a home with an Federal Housing Administration loan, a program administered by HUD — a Cruz presidency could significantly disrupt your plans. That’s not to say he’ll get rid of everything these departments do (his website said his administration would determine if any programs need to remain intact), but it seems impossible that these departments could disappear without sending shockwaves through certain populations.

These departments do a lot of things that directly affect Americans’ finances. The Department of Education is a good example: What would happen to student loans and programs the department runs, like student loan forgiveness? Given how many people use federal student loans to pay for college and how much student loan debt Americans have ($1.3 trillion of mostly federal loans), that’s no small question. (You can see how your student loan debt may be affecting your credit by viewing your free credit report summary each month on

3. A ‘More Stable Dollar’

Cruz has highlighted dollar instability as an economic woe for the U.S., saying that a highly valued dollar tends to lower prices and be good for the consumer, but that’s not good for manufacturers and exporters. A low dollar can result in the opposite, costing consumers but helping to grow the economy. He is proposing stabilizing the dollar by auditing the Federal Reserve.

“A rules-based monetary system would restore stability to the dollar and to the international currency system,” his website reads. “This will help us get beyond these cycles of boom, bust, and malaise, and return us to rising productivity, strong economic growth, and higher incomes for all.”

It’s hard to say how this proposal would affect your finances directly since stabilizing the dollar at high or low value will inherently be good for some and bad for others (and Cruz didn’t specify what he meant by “stable.”)

“The problem is there’s upsides and downsides to having a strong and weak dollar, and they both serve a purpose,” said Samuel Rines, an economist and portfolio manager with Chilton Capital in Houston. On top of that, the act of stabilizing currency is really complicated.

“Regardless of whether we wanted a stable currency, we would have to make a determination of how we would do that,” Rines said. It’s not just up to the United States. The economies of other countries affect the value of the dollar. “It would be really difficult to enact,” he said.

4. Lower Taxes

Cruz proposes a Simple Flat Tax. Instead of the seven existing tax brackets, everyone will pay a 10% income tax, but for a family of four, the first $36,000 will be tax-free. For tax year 2015, the lowest bracket starts at a 10% tax. Cruz says that tax change will increase wages by 12.2%. Note: With the proposed dissolution of the IRS, it’s unclear if you’ll have to file taxes to make sure you’re paying your required 10%. At any rate (pun intended), the way you pay taxes is likely to significantly change under a Cruz administration.

5. Job Creation

Cruz also claims that the Simple Flat Tax will create more than 4.8 million jobs. He’s also pitching approval of the Keystone Pipeline and similar projects that will expand oil, natural gas and ethanol operations, which he says will fuel job creation. So, if you’re among the 5.5% of unemployed Americans, that’s something to consider.

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