IRS tax fraud crackdown targets identity thieves
- Feb 8, 2012
By Kevin McCoy, USA TODAYUpdated 1/31/2012 2:51 PM
Dozens of suspected identity thieves and others pursuing fraudulent tax refunds have been arrested in a nationwide crackdown aimed at reversing a sharp increase in crimes victimizing honest U.S. taxpayers, the IRS said Tuesday.
Trying to send a message to would-be tax criminals as the federal tax season begins in earnest, the IRS said federal investigators took action against 105 individuals in 23 states over the last week, leading to arrests and indictments, serving search warrants and producing guilty pleas and court sentences.
The Florida-to-Alaska sweep also included separate visits to 150 money service businesses in nine metropolitan areas considered at high risk for identity theft or tax refund fraud.
"Identity thieves have figured out that if they can steal Social Security numbers, they can file false returns with us," said Steven Miller, the IRS deputy commissioner for services and enforcement. "Let me be clear that we will continue to pursue the criminals who would steal from the American taxpayer."
Calling such crimes a growing problem, Miller said the IRS last year stopped more than 260,000 fraudulent tax returns involving confirmed cases of identity theft, preventing an estimated $1.4 billion in refunds from reaching suspected criminals.
Those totals represent a jump from 2010, when the IRS said it stopped 48,966 returns for confirmed identity theft and halted $247 million in related tax refunds.
Suspected identity thieves buy or otherwise obtain taxpayer Social Security numbers from schools, hospitals, banks and elsewhere, then use those identifying numbers to impersonate honest taxpayers and steal their refunds, Miller said.
For instance, two Detroit area tax preparers were arrested and charged with conspiracy on Friday as federal prosecutors said the suspects used the stolen identities and Social Security numbers of recently deceased individuals to file 352 fraudulent tax returns seeking more than $800,000 in unmerited refunds.
Additionally, three Los Angeles area men were arrested last week for allegedly using Social Security numbers and identity data stolen from a state social services computer system in an effort to collect thousands of dollars in tax refunds. Unbeknownst to the victimized taxpayers, the alleged bogus tax returns claimed First Time Homebuyer Credits or Earned Income Credits, IRS investigators said.
In conjunction with the crackdown, Miller said IRS computer systems now use new tax compliance filters and identity theft screening filters designed to flag fraudulent tax returns for investigation. Such additional screening slowed refund checks for this year's early filers, he said. But the filters have been tweaked to prevent refund delays for honest taxpayers during the bulk of the filing season, said Miller.
Category: General Business