On Feb. 13 of this year, United States Attorney Robert E. O’Neill announced that Carlista Hawls, of Riverview, Florida, plead guilty to one count of tax fraud and one count of aggravated identity theft. Along with several accomplices, Hawls carried out a plan to file false income tax returns and used the personal information of unknowing tax payers to electronically file approximately 217 fraudulent federal income tax returns, FBI.gov reported. Before she was caught, the IRS gave Hawls $1,554,493 in false refunds and gave $551,472.90 to her conspirators. This is only one case out of the millions that have been reported this year alone.
A Snowballing Problem
According to Reuters.com, the U.S. Treasury Department reports that more than 1.2 million cases of tax fraud were reported in 2012, whereas only 48,000 had been reported in 2008. Another issue that is troubling officials in Tampa and other affected cities is that tax identity theft gangs have more association with violence and other criminal ties than Medicare fraud criminals. These ID theft gangs, first discovered by Tampa police in 2010, were found in hotel rooms filing fake tax return claims on their laptops, says Florida congresswoman Kathy Castor. United States Attorney for south Florida, Wifredo Ferrer, told Reuters that this issue is getting so far out of hand that it is causing a “tsunami of fraud.” While cases of fraud have been reported in all states, except for North Dakota and West Virginia, the IRS says that most cases are coming out of Miami and Tampa.
Answers for the Future
The rapid escalation of this crime has caused security company CEO’s like Todd Davis, of LifeLock, to offer the IRS a special tax identity theft protection technology. Davis says he would like to use LifeLock identity theft protection services to provide the IRS with a score that would indicate whether the tax refund claim that has been filed has a low, medium or high risk of fraud, said AccountingToday.com’s Michael Cohn. Davis said he would like to extend his company’s technology and services to the IRS because he has seen this crime grow so much within his own customer base.
IRS is Playing Catch Up
The IRS says they are increasing the number of agents who are focusing on tax fraud cases to 3,000, in an attempt to play catch up with cases that have been reported. The efforts of these agents prevented $20 billion in attempted tax refund fraud last year, says IRS commissioner Steven Miller. The IRS realizes that they must press on further in their efforts, as they already have a backlog of over 300,000 cases of reported tax fraud. Miller says that these cases will be addressed, but will take at least 6 months to be resolved. This is yet another reason why you should always file early, and protect your valued private information.