Tax fraud using identity theft is growing faster than government and law enforcment agencies can handle it. That’s what a House oversight subcommittee has been told today in Washington according to report on ABC News.
”As of Aug. 31 of this year, IRS incident tracking reports indicated that the numbers of taxpayers affected by identity theft has more than doubled since 2008 to over 580,000 taxpayers this year alone,” said J. Russell George, Treasury Department inspector general for tax administration.
The crime has become too easy. It’s like a party, according to Rep. Richard Nugent, R-Fla., whose district has a problem with tax-related identity theft.
“Tampa Police Department has busted what the lawbreakers call ‘make it rain’ parties, where criminals get together in a hotel room with Internet access and file fake return after fake return,” Nugent told the committee.
Chances of getting caught and punished are low because each fraud case amounts to an average of $3,400, often too little to merit prosecution. To make putting the criminals behind bars even more difficult, the IRS is limited by law in sharing information from a taxpayer’s return with local law enforcement authorities. Source
It can take as long as 18 months to get your tax sorted out if someone claims a tax credit in your name you can forget getting any due back taxes for a while.
The Boston Herald ran a report today about heartless identity thieves using the social security numbers of recently deceased children to fraudulently claim tax refunds.
According to the Herald:
The IRS estimates that dishonest tax filers this past tax season alone submitted returns on 350,000 dead Americans, falsely claiming $1.25 billion in refunds. The root of the problem is the SSA’s Death Master File that lists information, by law publicly available, on everyone who dies in the United States, including their Social Security numbers.
Ironically, it was created at the request of businesses to prevent the misuse of personal information. But that was in pre-Internet 1980.
The file contains 90 million names but con artists have begun to focus on the newest additions to the list, particularly children.
Last year, the Pilcher family of Potomac, Md., lost their infant daughter, Ava, to lung disease. As if that weren’t pain enough, the IRS rejected their 2010 income tax filing because someone else had already claimed Ava as a dependent. ID crooks need only file before the family does. Source
Joe says: In 2008 an audit by the Inspector General strongly recommended waiting a full year before making any information about a deceased American available to the public and removing social security numbers from the details passed to private genealogical societies who then add the information to their databases which can then be accessed by anyone signing up as a member.
None of the recommendations have as yet been carried out.
