Wednesday, September 26, 2012

IRS Boosts Staff in Tax Refund fraud



The Internal Revenue Service is tripling the number of staff members nationwide who are dedicated to addressing the issue of identity theft tax refund fraud, U.S. Rep. Kathy Castor said.
Castor, the Tampa Democrat, said she was briefed Friday by IRS officials regarding progress the agency is making to tackle the epidemic of fraud in which the Tampa area leads the nation.
Thieves use stolen personal information — such as names, dates of birth and Social Security numbers — to file tax returns with fake income information and obtain fraudulent tax refunds.
According to a recent inspector general report, thieves in the Tampa area alone stole more than $400 billion last year from federal taxpayers this way. Nationwide, identity thieves are stealing billions from the federal government through refund fraud.
Castor said the IRS assured her it is increasing its screening filters, designed to detect fraudulent returns before refunds are issued. Across the board, law enforcement officials have repeatedly said the fraud is so pervasive, it cannot be stopped by arrests and prosecutions — that the IRS needs to stop sending "refunds" to thieves.
The IRS told Castor that so far this year, it has prevented 2.3 million fraudulent refunds from being issued, totaling $15 billion. That's compared to 1.4 million fraudulent refunds stopped in 2011, worth $11 billion.
Part of that effort apparently involves increasing scrutiny of tax filings originating from Tampa, Castor noted.
"I said, 'Geographically, where you know there is an epidemic, like the Tampa Bay area and the state of Florida, I assume filters are place.' They said yes.
"They say they're on the cusp of instituting many, multiple new filters to prevent the fraud from happening in the first place," Castor said.
"So they will flag, for example, multiple returns coming to the same address. That's a question I keep getting. How can it be that the IRS is sending multiple debit cards and returns to the same address over and over?"
Castor also noted something police have been saying: often crooks will use the same fake numbers repeatedly on numerous returns. For example, two suspects indicted this week were accused of filing 17 tax returns, each seeking refunds of $1,453.
The new filters, Castor says she was assured, "will flag that."
While Castor was encouraged by the new IRS approach, she added, "I know from the folks coming to my office with checks and calls and people I see in the grocery store, this is still a huge problem and we've got to continue to press the IRS until Tampa no longer is number one for tax fraud."
Full article can be found here.

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