Anthem was the target of a sophisticated external cyber-attack in which personal data for as many as 80 million (1 out of every 4 Americans) records for current and former customers has been exposed.  This was caused by a database breach on February 4^th.  According to the company, the stolen information includes names, birthdays, social security numbers, street addresses, email addresses and employment information.

The type of information believed to have been stolen is ideal for various forms of identity theft, including federal income tax return fraud, the most common type of theft, in which criminals use stolen personal data to file a false tax return with the IRS. The criminals might also look to open new lines of credit and obtain new credit cards in your name.

According to the U.S. Department of Justice website, stolen identity refund fraud prevents hundreds of thousands of American taxpayers from receiving timely income tax refunds each year and costs the U.S. Treasury billions of dollars in fraudulent refund payouts.

Anthem has already begun individually notifying those who are impacted by this breach in the form of a letter and will continue to do so within the next two weeks. Taking some precautions now can help protect yourself from the misuse of the stolen data.

If you receive a letter from the Internal Revenue Service informing you that they are reviewing your 2014 tax return, you should contact your accountant right away, especially if you have not filed your 2014 tax return.  If tax fraud was committed using your personal information, you will be required to file Form 14039 Identity Theft Affidavit with the IRS.

To learn more, Anthem has created a dedicated website (www.AnthemFacts.com) where you can access information such as frequently asked questions and answers.

The Ohio Department of Taxation began sending notifications to individual taxpayers that their 2014 Ohio income tax refunds may be delayed due to additional precautions being taken to prevent tax fraud.

Below is the full text of the communication released by the Ohio Department of Taxation:

“In order to better protect Ohio taxpayers and prevent tax fraud, the Ohio Department of Taxation (ODT) is implementing additional safeguards that will inevitably cause some refunds to be delayed this upcoming income tax filing season.

These steps are being taken to further bolster defenses in anticipation of a continuing increase in attempted tax fraud involving identity theft. Last year, ODT intercepted an unprecedented number of fraudulent income tax returns seeking to steal refunds totaling more than $250 million. In previous years, attempted tax fraud averaged about $10 million.

To detect and counter refund fraud related to ID theft, an additional up-front filter will now be applied to all tax refund requests to analyze the demographic information reported on a return. This analysis will then assign a “probability of fraud” factor that will determine how the return is then further processed by ODT.
If a return is pulled for review, ODT’s additional security measures will require some taxpayers to successfully complete an Identification Confirmation Quiz, before the return will continue to be processed. If a taxpayer’s return is selected for identity confirmation they will receive a letter from ODT directing them to our website (www.tax.ohio.gov). The website will provide access to the quiz, detailed instructions on how to complete it, and frequently asked questions for reference. Taxpayers without Internet access will be directed to call ODT at 1-855-855-7579, for assistance with completing the quiz.

The additional screening and security measures will unfortunately slow the processing of electronic and paper returns, and the issuance of refunds. Electronic returns requesting a refund may take up to 15 days to be direct deposited this year, and paper returns could take up to 30 days for a physical check to be mailed out.”