It's been well known for weeks that the problem of income tax refund fraud linked to identity theft is a major challenge for the IRS this year. In our December 3 post, we wrote about one such incident and the IRS's plans for addressing the broader problem this tax season.
Two weeks into the New Year, it's clear that the IRS and federal prosecutors continue to have its hands full responding to this particular form of tax fraud. In South Florida, a special task force has been set up to deal with the issue. The task force has units in Miami-Dade, Palm Beach and Broward counties.
Last week, federal law enforcement authorities arrested a Florida couple in Fort Lauderdale after they allegedly tried to sell a computer flash drive loaded with personal information from people whose identities had been stolen.
Such information includes names, Social Security number and birth dates. It can be used to file fraudulent tax returns in an attempt to falsely obtain tax refunds.
In the last three months, the federal task force in South Florida has arrested about 100 people suspected of tax fraud involving identity theft and tax refunds. A spokeswoman for the U.S. attorney's office in Miami said the amount of fraudulent refunds in these cases alone adds up to over $40 million.
U.S. Attorney Wilfredo A. Ferrer compares the problem of tax fraud linked to identity theft to a virus. He says it has been spreading across South Florida because it is less violent and more financially rewarding than other forms of crime.
In our next post, we will write more about how the IRS and federal law enforcement officials are trying to treat this virus.
Source: "Thieves steal thousands of South Floridians' IDs to file fake tax refund," Sun Suntinel, Donna Gerhrke-White, 1-10-13
Our firm handles situations similar to those discussed in this post. To learn more about our practice, please visit Miami tax fraud page.