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Your Money Matters by Thomas Sottile, Esq.
Be Vigilant To Protect Against
Identity Fraud During Tax Season
A famous quote by humorist F.J. Raymond is that, “Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.”
Unfortunately, the tax refund has become a growing target for fraud artists who see these government payouts as easy money, so long as they can file multiple returns to make it worth their while, and stay one step ahead of the law in doing it.
The first part of that equation is where we, members of the unsuspecting public, come into the picture. Because in order for this criminal enterprise to be lucrative enough to risk camp time at Allenwood or Lewisburg, courtesy of the Federal Bureau of Prisons of course, many distinct Form 1040s have to be filed using different names, addresses, social security numbers and supporting documents. Identity theft is the means to that end.
Often the first time a taxpayer becomes aware that he or she has been victimized in this way is when a mailed notice is received from the IRS, letting the victim know that their personal information has appeared on another tax return filed that year. The notice also may inform the recipient that they have failed to report wages which they never received from an employer who they never worked for. This happens when another person uses the victim’s social security number to obtain a job, and the earnings are reported under that identifier to the IRS.
The ways that victims’ identities are stolen today run the gamut from the creatively high-tech to the rudimentary, i.e., purse-snatching, pickpocketing and rummaging through trash for credit card receipts.
To fight the more sophisticated scammers, the IRS has made a considerable effort to get the word out that: Now Hear This! The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS does not send emails stating that we are being audited electronically, or that we are getting a refund. This deception has been a primary tool of fraud artists in the computer age. And it’s easy to see why since the bad guys have come very close to mirroring the IRS’s logo, and mimicking bureaucratic language in false email messages to pull off the trick. Websites which correctly belong to the IRS will have an address beginning with “www.irs.gov.”
Made-up emails and sham websites are today’s technological booby-traps, luring victims into filling out forms and answering surveys for a free gift. All this is for simply giving up your name, address and social security number, and then hitting the send button. Don’t take the bait!
In recent low-tech cases, personal information has been stolen by an employee of a healthcare provider; a cleaning person at a residence for mentally challenged adults; the owner of a defunct business which had assisted college-bound students; and from a police warrants book which contained the identifiers of individuals who were wanted by law enforcement.
In January of this year an Arizona resident was arrested in Pittsburgh, PA and charged in federal court with identity theft in connection with his operation of a tax preparation business called, “Uncle Sam’s Tax Service.” He is alleged to have used the names of deceased taxpayers gleaned from California death records to file tax returns and obtain refunds in 34 different instances, for a total of $279,000. According to the indictment, the false 1040s were complete with wages, income-tax withholdings, dependents, tax credits and other deductions.
In a similar recent case in Detroit, two tax preparers were arrested and accused of filing 352 false returns electronically in an attempt to obtain about $800,000 in refunds. The perpetrators allegedly used the names of taxpayers who had died about a year prior to the filing of the false tax returns. Personal representatives for the estates of some of the decedents raised an alarm when the legitimately filed tax returns were rejected because another return already had been filed and a refund issued. The IRS reports that false returns usually are filed as early as possible in the tax season in order to garner the refund before the true taxpayer has an opportunity to file.
The IRS operates a toll free Identity Theft Hot-line at 1-800-908-4490, and offers Publication 4535, “Identity Theft Prevention and Victim Assistance,” to help taxpayers who are caught up in a scam. The IRS Form 14039, Identity Theft Affidavit, is an aid for victims to demonstrate that they have been defrauded, and to prove their blamelessness to those who might have been taken advantage of through the misuse of the their names.
If someone claiming to be from the IRS calls on the telephone or sends correspondence, the IRS has a phone number for taxpayers to verify that the contact is legitimate: 1-800-829-1040.
A person who believes that their identity has been compromised should report it to the local police, and also at www.consumer.gov/idtheft, or call the Federal Trade Commission Identify Theft Hotline at 1-877-438-4338.
It causes a bad feeling in the pit of the stomach when an innocent person learns that someone compromised his or her identity on something as important as a tax return, in order to steal a refund which rightfully is theirs, and which they had planned on receiving.
It’s true that sometimes no matter how vigilant we may be, because of someone else’s lack of concern or negligence, another person is posing as us before the IRS, or running amok with our well-earned good credit. Like a snag in a fishing reel, there is little choice but to undo the problem inch by inch, and not to be afraid to ask for assistance as needed so that the matter eventually will be set right.
*
Thomas Sottile is an attorney in Media, PA. He retired from the U.S. Postal Inspection Service after 23 years as an investigator and attorney.
Be Vigilant To Protect Against
Identity Fraud During Tax Season
A famous quote by humorist F.J. Raymond is that, “Next to being shot at and missed, nothing is really quite as satisfying as an income tax refund.”
Unfortunately, the tax refund has become a growing target for fraud artists who see these government payouts as easy money, so long as they can file multiple returns to make it worth their while, and stay one step ahead of the law in doing it.
The first part of that equation is where we, members of the unsuspecting public, come into the picture. Because in order for this criminal enterprise to be lucrative enough to risk camp time at Allenwood or Lewisburg, courtesy of the Federal Bureau of Prisons of course, many distinct Form 1040s have to be filed using different names, addresses, social security numbers and supporting documents. Identity theft is the means to that end.
Often the first time a taxpayer becomes aware that he or she has been victimized in this way is when a mailed notice is received from the IRS, letting the victim know that their personal information has appeared on another tax return filed that year. The notice also may inform the recipient that they have failed to report wages which they never received from an employer who they never worked for. This happens when another person uses the victim’s social security number to obtain a job, and the earnings are reported under that identifier to the IRS.
The ways that victims’ identities are stolen today run the gamut from the creatively high-tech to the rudimentary, i.e., purse-snatching, pickpocketing and rummaging through trash for credit card receipts.
To fight the more sophisticated scammers, the IRS has made a considerable effort to get the word out that: Now Hear This! The IRS does not initiate contact with taxpayers by email to request personal or financial information. The IRS does not send emails stating that we are being audited electronically, or that we are getting a refund. This deception has been a primary tool of fraud artists in the computer age. And it’s easy to see why since the bad guys have come very close to mirroring the IRS’s logo, and mimicking bureaucratic language in false email messages to pull off the trick. Websites which correctly belong to the IRS will have an address beginning with “www.irs.gov.”
Made-up emails and sham websites are today’s technological booby-traps, luring victims into filling out forms and answering surveys for a free gift. All this is for simply giving up your name, address and social security number, and then hitting the send button. Don’t take the bait!
In recent low-tech cases, personal information has been stolen by an employee of a healthcare provider; a cleaning person at a residence for mentally challenged adults; the owner of a defunct business which had assisted college-bound students; and from a police warrants book which contained the identifiers of individuals who were wanted by law enforcement.
In January of this year an Arizona resident was arrested in Pittsburgh, PA and charged in federal court with identity theft in connection with his operation of a tax preparation business called, “Uncle Sam’s Tax Service.” He is alleged to have used the names of deceased taxpayers gleaned from California death records to file tax returns and obtain refunds in 34 different instances, for a total of $279,000. According to the indictment, the false 1040s were complete with wages, income-tax withholdings, dependents, tax credits and other deductions.
In a similar recent case in Detroit, two tax preparers were arrested and accused of filing 352 false returns electronically in an attempt to obtain about $800,000 in refunds. The perpetrators allegedly used the names of taxpayers who had died about a year prior to the filing of the false tax returns. Personal representatives for the estates of some of the decedents raised an alarm when the legitimately filed tax returns were rejected because another return already had been filed and a refund issued. The IRS reports that false returns usually are filed as early as possible in the tax season in order to garner the refund before the true taxpayer has an opportunity to file.
The IRS operates a toll free Identity Theft Hot-line at 1-800-908-4490, and offers Publication 4535, “Identity Theft Prevention and Victim Assistance,” to help taxpayers who are caught up in a scam. The IRS Form 14039, Identity Theft Affidavit, is an aid for victims to demonstrate that they have been defrauded, and to prove their blamelessness to those who might have been taken advantage of through the misuse of the their names.
If someone claiming to be from the IRS calls on the telephone or sends correspondence, the IRS has a phone number for taxpayers to verify that the contact is legitimate: 1-800-829-1040.
A person who believes that their identity has been compromised should report it to the local police, and also at www.consumer.gov/idtheft, or call the Federal Trade Commission Identify Theft Hotline at 1-877-438-4338.
It causes a bad feeling in the pit of the stomach when an innocent person learns that someone compromised his or her identity on something as important as a tax return, in order to steal a refund which rightfully is theirs, and which they had planned on receiving.
It’s true that sometimes no matter how vigilant we may be, because of someone else’s lack of concern or negligence, another person is posing as us before the IRS, or running amok with our well-earned good credit. Like a snag in a fishing reel, there is little choice but to undo the problem inch by inch, and not to be afraid to ask for assistance as needed so that the matter eventually will be set right.
*
Thomas Sottile is an attorney in Media, PA. He retired from the U.S. Postal Inspection Service after 23 years as an investigator and attorney.