In March, a Clinton woman received a phone call from a special agent of the Internal Revenue Service. He told her the IRS detected someone filed an income tax return, claiming a return, in her name. The woman did not file her tax returns yet.
This is an example of identity theft involving tax fraud.
One of the dangers of identity theft is someone with your personal information, especially your social security number, can file a tax return in your name and claim the refund. It’s likely you won’t realize this until you do get notification from IRS, or you notice a delay in your refund.
From my research, it looks like this kind of fraud is quickly increasing. The IRS tells us they realize what an issue this is for taxpayers, and are devoting much greater resources in 2013 than in previous years to preventing, detecting, and prosecuting this kind of tax fraud.
The IRS reports in 2011 they prevented $14 billion in refund fraud, and this rose to $20 billion.
The Clinton woman said the IRS contacted her about the fraud. This is likely the result of their identity theft screening filters. They report great expansion in the number and quality of their filters, which spot fraudulent returns before refunds are issued. They report using “dozens” of filters.
They report 3,000 employees, double the number from 2011, working on identity theft. They report arrests of identity thieves in tax cases will almost triple from 2012 to 2013.
And it does not sound like this tax fraud arrest is a slap-on-the wrist deal. Court records show sentences like 21 years in federal prison to a Memphis woman who stole records from the Memphis Police Department and then sold them to others who electronically filed tax returns. Or 9 1/2 years to a Chicago man who used names of 470 dead taxpayers to file return claimining $120 million in refunds from 2007 to 2011.
There exist many ways to lose your identity, more than space here allows to detail, but one effective one is phishing. The below message is taken directly from the IRS website, and defines phishing, and tell us what to do about it.
The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.
What is phishing?Phishing is a scam typically carried out by unsolicited email and/or websites that pose as legitimate sites and lure unsuspecting victims to provide personal and financial information.
All unsolicited email claiming to be from either the IRS or any other IRS-related components such as the Office of Professional Responsibility or EFTPS, should be reported to email@example.com.
However, if you have experienced monetary losses due to an IRS-related incident please file a complaint with the Federal Trade Commission through their Complaint Assistant to make that information available to investigators.”
The IRS website publishes some real-life examples of phishing email messages, and they look quite official. If you receive a mailed notice from the IRS indicating identity theft, follow the instructions. If you think your tax return is at risk due to lost or stolen identity, contact the IRS Identity Protection Specialized Unit at 800-908-4490.
Stealing from Mary Kay?
A local Mary Kay sales representative notified the Clinton Police Department about how crooks defrauded her of more than $1,000. Someone contacted her and ordered a lot of Mary Kay products, with instructions to send them out of state.
The buyer sent a corporate check, much larger than the balance due, to pay for the products, with instructions to the Mary Kay rep to deposit and send the excess via Moneygram to another out-of-state woman. After the sales rep sent off the money as directed, she found out the check was counterfeit, thus lost her money.
This is yet another twist on use two different tools, checks and wire transfers, I see crooks using repeatedly to steal. All these scams can be stopped if you remember these simple instructions:
• Don’t send money by Moneygram.
• Don’t send money by Western Union.
• Don’t buy green dot moneypaks unless you absolutely understand what they are and what you need them for.
I am more than happy to assist you with questions about scams or fraud, or if you are just wondering about a phone call, email, or letter you received. Contact me at 242-9211, ext. 4433.
Randy Meier is the director of Seniors vs. Crimes at the Clinton County Sheriff’s Department.