Dealing with tax ID fraud

by beth on April 16, 2015

You may have heard about an alarming increase in tax fraud over the past couple years. It’s not taxpayers defrauding the government on how much they owe. It’s scammers stealing money from the government under your tax ID.

I was sorry to see by a Facebook post from Southborough Police that several residents have reported they were victims.

If you were a victim, or know someone was, here’s some helpful information they shared:

In this post we are sharing a great reference article that our friends at the Natick Police Department have ‘shared’ on their Facebook page. There have been quite a few residents of Southborough that have recently reported being victims of this same identity theft/ false tax return scam. Please follow this link for more information, and make sure to ‘share’ with your family and friends.

Posted by Southborough Police Department on Tuesday, April 14, 2015

1 Hope this is helpful April 16, 2015 at 7:14 PM

My wife and I were victims last week of this fraud.

I want to start by thanking the Southborough police for their assistance. My understanding is that they are investing a lot of their time handling a multitude of issues around fraudulent tax filings.

Here is my warning and my story:

First, if you receive a debit card in the mail that you didn’t order (e.g., from a company you’ve never done business with…or have no knowledge of) your identity may be compromised. This was our first warning…but I didn’t understand the signifigance…and stuck it in a pile of “things to figure out later”.

When we attempted to e-file the tax software advised us that a return had already been filed under our social security #’s. Several calls were made to the IRS and the debit card company. In summary, my call stopped the fraud… the debit card was closed and the IRS advised of the fraudulent return.

Here’s what the person did. They e-filed with our personal info, and filed for a tax refund (by the way, we’ve been married 20 years and never received a refund… we pay and pay…). They paid $20 for a debit card, in Florida, completed the form with my name, address, ss# and dob, never had to show identification (it’s not required for a debit card), and they were off to the races. Then they e-filed and requested that the deposit be made to the debit card.

Here are my main concerns. The IRS processed this for payment, but there appears to have been major differences between this return and our prior returns. This is very disturbing to me, and I’ve started to work the issue with Senator Warrens office. I am asking for their assistance to help me understand how the IRS screened this return… and did not flat out reject it.

Now, let’s talk about debit cards. It appears that anyone can open a debit under any persons name, ss#, address and dob… without having to show identificaiton. As unbelieveable as it sounds, this appears to be a fact. In addition, the debit card companies do not post an inquiry to the credit bureau… after all it’s not a credit card.

These are big issues. This is a glaring hole in the IRS debit card company partnership.
Proof of identity and notice to the credit bureaus could stop the fraudulent process cold.

So now, a week later, I’ve filed reports with the credit bureaus, the IRS, the Inpector General, the FTC, and Senator Warrens office. Probably spent 40 hours. I expect this will take a year to straighten out.

2 beth April 17, 2015 at 1:19 PM

I remembered seeing a segment on this in the fall that explained some of the issues of why the IRS couldn’t stop this (at least not yet.) It’s astounding.

Thought you and others dealing with this might be interested.

http://www.cbsnews.com/videos/the-islamic-state-the-tax-refund-scam/

I don’t recall if it’s mentioned in this story – but scammers start working the first day it’s legal to file a return. While real taxpayers usually still are waiting for the tax forms they need to arrive in the mail. So, it can be impossible to file your return before the scammer.

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