Posts Tagged ‘Death.Master.File’

The Death of the Death Master File (Sort of)

Thursday, December 19th, 2013

I’ve been complaining about the Death Master File for some time. This is a wonderful tool for identity thieves, allowing them to get all the details for an individual who has gone to the great beyond. As Jason Dinesen noted, it’s almost certainly the way one of his clients was a victim of identity theft. It’s also the method used in an attempted identity theft of my partner’s deceased stepfather.

But no more. Congress, as part of passing a budget (the first budget passed in years) inserted language requiring the Commerce Department to set up a process to verify users of the Death Master File; for “normal” users, it will take three years (after a person dies) before information is released.

What does this mean? First, file a final tax return for anyone who has passed on. That will tell the IRS that there should be no more tax returns for that social security number.

Second, while the Commerce Department has 90 days to set this program up, expect them to take longer. There’s no penalty on the government if it doesn’t act expeditiously, so I’d estimate it will be sometime in April at the earliest before this is set up. That means we have one more tax season of identity theft from the death master file.

Still, as Jason said, “All I can say is — thank you Congress (how often do we say that anymore?), and it’s about time.”

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A Story of Identity Theft; Why Is the Death Master File Still Available?

Sunday, August 26th, 2012

My father died almost six years ago. It’s something that’s inevitable for all of us. My mother was lucky in one respect: No one stole my father’s identity at death. Unfortunately, such identity thefts are becoming far more common.

Jason Dinesen, an Enrolled Agent in Iowa, ran a seven-part story in his blog relating the identity theft of a young widow’s late husband. He has four conclusions (all of which are valid imho). I’m going to focus on the last one:

Congress needs to do something to fix the problem with the Death Master File. It’s ridiculous that the government publishes something that is such a goldmine for identity theft.

I’ll add another story of identity theft. My partner’s stepfather passed away last January. When we filed his 2010 tax return we discovered that he was a victim of identity theft. Someone from Tampa, Florida (hundreds of miles away from where the stepfather lived) filed a tax return using his name and social security number. We both asked ourselves how in the world did a Tampa resident get the name and social security number? There were absolutely no connections between the stepfather and Florida. We both thought that the most likely means was the Death Master File.

So you’re asking, what is the Death Master File? Well, you can find it on the Internet.
 While a single search costs about $10, you can search 1 million names for $12,000. If I’m a crook and I want to do some identity theft, I don’t need that many names. I could just do 5,000 for only $1,500. If each of my 5,000 phony tax returns nets me $1,500, I’ll have a very nice rate of return.

Mind you, I can see that there are legitimate purposes for the Death Master File. When I initially became an IRS e-service provider I went through a background check. At a minimum, such checks should be required for subscribers to the Death Master File.

Identity theft is a growing crime. To have the government assisting in the crime is horrible. Yet that’s exactly what’s happening today.

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Posted in IRS | 2 Comments »