Tags: Identity | Thieves | tax | returns

NY Times: ID Thieves Use Bogus Tax Returns to Loot US Treasury

Wednesday, 30 May 2012 07:22 AM

Using only stolen Social Security numbers and the names and birth dates that correspond to them, criminals have electronically filed thousands of false tax returns with made-up incomes and withholding information — and have received hundreds of millions of dollars in wrongful refunds, The New York Times reports.

The thieves file the phony tax returns before the legitimate taxpayers file their returns, many times receiving refunds in the form of government-approved, prepaid debit cards instead of checks.

The scope of this crime doesn’t end with theft, either. One mail carrier was murdered while making rounds with a mail truck full of debit cards and master keys to mailboxes, and many others have been robbed.

Editor's Note: Sept. 18 Cover-Up Is a Final Turning for America

The fraud is costing taxpayers hundreds of millions of dollars annually, federal and state officials say, because the Internal Revenue Service winds up paying two refunds instead of one when legitimate taxpayers file the necessary paperwork to receive money that’s already been paid to thieves.

Identity-theft reports are coming in from all over the country: J. Russell George, the Treasury inspector general for tax administration, testified before Congress this month that the IRS detected 940,000 fake returns for 2010 in which identity thieves would have received $6.5 billion in refunds.

George also said the agency missed an additional 1.5 million returns with possibly fraudulent refunds worth more than $5.2 billion.

The identity-theft scheme is being worked in all parts of the country, but Florida is especially hard hit because of its large population of elderly residents and healthcare facilities provide numerous targets.

Wifredo A. Ferrer, U.S. attorney for the Southern District of Florida, has formed a task force of 18 federal and state agencies to combat the problem, but says the problem is getting worse anyway.

“The IRS is doing what they can to prevent this, but this is like a tsunami of fraud,” Ferrer said.

“Everywhere I go, every dinner, every function I attend, someone will come up to me and tell me they are a victim — people in this office, police officers, firefighters.”

According to a report from National Public Radio, the U.S. Postal Inspection Service has said identity theft is the fastest-growing crime in the country, and many victims are children, which enables thieves to get away with the crime for years.

Editor's Note: Sept. 18 Cover-Up Is a Final Turning for America

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Wednesday, 30 May 2012 07:22 AM
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