FTC Advice On How To Deal With Equifax Hack: Er... Race The Hackers To Filing Your Taxes Before They Do

from the what-the-actual-fuck dept

So, yes, by now you know all about the whole Equifax hack and how really, really terrible it is. Lots of sites have been posting various stories about what you should do about it, when the truth is you really can't do much. A lot of people are likely going to deal with an awful lot of bad stuff almost entirely because of this leak by Equifax. Not surprisingly, the FTC has weighed in with some suggestions, most of which won't actually help very much. Most of them are the standard suggestions everyone's giving -- including checking your credit reports, putting a credit freeze on your files and basically watching very closely to see if you're fucked over by whoever has access to these files.

But the FTC's very last suggestion is the one I wanted to focus on today. It's basically "um, well, maybe try to file your tax returns early next year, so you beat hackers trying to do the same?"

File your taxes early — as soon as you have the tax information you need, before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job. Respond right away to letters from the IRS.

As someone who has been a victim of someone filing fake tax returns to try to get your refund, it's a really shitty process to go through. The problem here, though, is the whole setup of our tax system, which makes it pretty damn easy for someone to fake your tax returns -- now made even easier thanks to this breach. If the FTC really wanted to help, it should be pushing for a complete overhaul of how tax filing works, such that merely knowing your Social Security Number and address isn't enough to file tax returns in your name. Among the many problems here, it starts with the idiotic idea that we use SSNs as an identity tool -- but there's also the fact that we continue to have the IRS force every American to play a guessing game with their taxes just to keep tax prep companies like Intuit and H&R Block happy.

I recognize that the FTC isn't directly in a position to fix this, but the fact that it's best suggestion is "race the hackers to filing your tax returns and hope you get there first" should highlight just how totally fucked up our income tax system is in the US.

Filed Under: ftc, hackers, social security numbers, tax returns
Companies: equifax

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  1. identicon
    Andrew D. Todd, 12 Sep 2017 @ 12:41pm

    A Simple Fix

    I think the problem is commingling of identifiers and passwords. Identifiers and passwords have conflicting functions, and the problem arises when one number tries to be both. So, what we do is to face facts, and say that Social Security Numbers and Dates of Birth are identifiers, and it happens that they are now public, and people must immediate cease using them as passwords. All we have to do is explicitly issue passwords in appropriate ways.

    Forms pertaining to tax withholding (W-2's, Form 1099, K-1, etc.) shall be given an additional number, a random number peculiar to that form, that employer, that taxpayer, and that year, in addition to the existing numbers, and this number shall be reported to the taxpayer and the IRS in the usual way, and the tax-payer shall copy it into his tax return. There will need to be fairly minor modifications of the tax schedules to allow inserting the passwords, but there is plenty of time to do that. It's only September.

    The IRS can work with the state Departments of Motor Vehicles. The DMV checks not only paperwork, but also biometrics. It knows things off the birth certificate like the name of the obstetrician. The DMV finally confirms the address of an identity-holder by snail-mailing the card-- with instructions not to forward it.

    When you file a change of address with the Post Office, they sensibly send paper notices-- by snail-mail-- to both the old and new address. I think you can file a change of address on the internet. I filed mine by physically going in to the post office. The IRS can always send out refund checks by snail-mail. This will be rather hard on the tax preparation companies, which make money on Refund Anticipation Loans, at more or less usurious interest. No matter, they will find a way to solve their problem.

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