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Identity Thieves Get IRS Tax Refunds

Written by Gary North on May 28, 2012

An article in the New York Times reveals that criminals have found ways to change places online with law-abiding Americans. They are fooling government agencies, including the IRS, regarding payments owed to citizens.

These thefts begin with stolen Social Security numbers. Then they get birth dates. With this information, which seems minimal, the thieves are filing refund requests.

How much money is involved? Over $6 billion in 2010. Compared to the total of money collected, this is chump change. But it’s indicative of the ability of criminals to fool the IRS’s computer system. It could be more money than this, however. The IRS may not be reporting the full details.

They file early, before citizens file.

The money sometimes goes to pre-paid debit cards. These are easily available. They are difficult to trace. They are available from tax-preparation services. In other cases, postal workers have been robbed to get trucks full of them.

In some cases, the IRS must pay the refunds twice.

The Inspector General fr tax administration of the IRS testified before Congress that the IRS in 2010 detected a total of 945,000 counterfeit returns in 2010. Payouts: $6.5 billion. The agency may have missed an additional 1.5 million returns.

In other words, the agency does not know how many returns were fraudulent.

Florida is #1 for these fraudulent returns.

The Times reports the following:

The United States attorney for the Southern District of Florida, Wifredo A. Ferrer, called identity-theft tax fraud an “epidemic.” He formed a task force of 18 federal and state agencies, including the I.R.S., to combat the problem. Despite those efforts, it is worsening, Mr. Ferrer said.

“The I.R.S. is doing what they can to prevent this, but this is like a tsunami of fraud,” Mr. 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.”

It has been growing fast over the past two years. With 100 million tax filings a year, fraud is relatively easy.

The is a bill before the Senate to increase the penalties for tax fraud identity theft. Supporters claim the present penalties are too low.

The question arises: If stolen identities are this easy to exploit, how widespread is it?

I have identity theft insurance through my homeowner’s policy.

Continue Reading on www.nytimes.com

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4 thoughts on “Identity Thieves Get IRS Tax Refunds

  1. Solution: get rid of the income tax. No tax, no refund, less theft.

  2. ProundPatriotToo says:

    ACORN and Obama are behind this. The IRS knows that they are sending $1,000.00 to Mexican children who live in Mexico, via the illegal Mexicans here, who have two families and two wives. My SS is less than 1,000.00 and these bums' children are getting more than me and are not eligible. Obama gave the IRS the green light to do this. The info is all over the internet. Congress wont stop it. Next these brats will be getting free medical care, etc.

  3. Jo baldin says:

    Proud patriot : in California illegals are collecting welfare, Medical, dental, education, section 8 housing money & they all hold jobs? How? What happened to E verify or produce a birthcertificate? Now they are stealing SSN from children because kids don’t file tax returns until they are older & it’s screwing up people who try to get benefits. Someone out here filed for unemployment on my SSN when I was active duty army….

  4. Tionico says:

    social security numbers have been demanded for so many illegal uses.. they are "for taxpayer identification purposes only", by law.. why is anyone surprised they are so easy to get> Utility companies, cel phone providers, driving licenses, vehicle purchases, car and home insurance.. and countless more, demand that SSN. Protest and you get treated like you're psycho. Once more,r by allowing thus constant abuse of our personal information, we have brought it upon ourselves. With continued pressure from government. Trouble is, once your SSN has been broadcast, there is NO PROVISION for changing it, like you can when a credit card number gets compromised. Stupid……