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  • South Florida ID thief who testified to U.S. Senate strikes again.

    Posted on June 26th, 2013 admin No comments

    After stealing the identities of several South Floridians — including a former owner of the New York Mets — Jeffrey Emil Groover made it seem like he was truly sorry for his crimes.

    He even testified to a U.S. Senate committee while he was serving a federal prison term in 2004 and offered some helpful suggestions to lawmakers about how to stop people like him from victimizing others.

    But on Thursday, Groover admitted that he again used other people’s identities to steal money by claiming the victims had signed over checks to him for pre-paid pest extermination and disinfection services.

    Groover, 52, who recently was listed at addresses in West Palm Beach and in Broward County, had no comment after the brief hearing in federal court in Fort Lauderdale. He faces a maximum of 20 years in prison and up to $1 million in fines when he is sentenced in August.

    Records show he was released from federal prison in 2006 after serving a four-year term for credit card fraud that involved stealing the identities of several people, including Nelson Doubleday, the wealthy Jupiter Island resident who formerly co-owned the Mets.

    Groover went on a yearlong spending spree at the time on lines of credit he obtained under other people’s names. Doubleday tipped off authorities, and when they investigated further, they found Groover also had used Palm Beach philanthropist Donald Burns’ identity to buy a BMW, a Rolex watch and rare coins, according to court records.

    Groover also was ordered to pay more than $270,000 in restitution.

    While Groover was serving his prison term for those offenses, he addressed the U.S. Senate’s Special Committee on Aging in March 2004, telling senators that he had used the internet to obtain personal information about wealthy targets, open credit card accounts and even tap into his victims’ bank accounts.

    “I came here to assist my country, and in some small way to find redemption for what I’ve done,” Groover testified to the committee. “I lost my home, my business, my freedom and most of all my wife and children for what I did. The punishment is severe, and rest assured that I will not do it again. However, that will not stop other people from continuing to do this type of crime due to the ease in which it can be done.”

    He went on to outline his suggestions for curtailing such opportunities and apologized to his victims. He blamed the failure of a small internet service provider that he owned in the late 1990s for putting him in financial difficulty and said he resorted to fraud to keep his business going and support his family.

    Groover’s more recent crimes came to light when a check-processing service noticed and reported suspicious activity in a merchant account he opened in March 2012. According to court records, Groover had set up a West Palm Beach-based corporation called Affordable Pest Protection Inc., which IRS criminal investigators and federal prosecutors said “purported to be a provider of pest extermination and disinfection services.”

    Analysts at the check-processing service became suspicious of Groover’s transactions within days of him opening the account and they notified authorities. Groover had attempted to cash several U.S. Treasury tax refund checks, records show.

    When the company asked him to explain the activity, Groover told them he had met with each of the people named on the tax refund checks and they had agreed to turn the proceeds of those checks over to his business.

    “Groover further explained that he was trying to mimic automobile dealerships’ promotions by allowing clients to bring him their tax refund checks and apply the refund amounts to pre-paid pest control services,” agents wrote.

    When agents tracked down the people identified on the checks, they found that none of them had filed the income tax returns or authorized anyone to use their information.

    One of the victims was a man who had died in Broward County in April 2008, and other victims included an Oregon man and women from Tampa and Michigan, according to the criminal complaint.

    Groover pleaded guilty Thursday to four counts of making and presenting false claims to the IRS. He reached a plea agreement after learning prosecutors planned to file more charges, including several counts of aggravated identity theft, against him, according to court filings.

    Groover admitted he had targeted more than 10 victims and the intended loss was between $200,000 and $400,000, U.S. District Judge Robin Rosenbaum said in court.

    (source)

  • Come tax time, many refunds go to identity thieves.

    Posted on April 15th, 2013 admin No comments

    An epidemic of tax-related identity theft continues to plague the Internal Revenue Service despite efforts by the agency and law enforcement officials to combat the fraud, witnesses told a Senate panel Wednesday.

    “We are losing $5 billion each year to this crime, and now the problem is getting worse,” said Sen. Bill Nelson, D-Fla., the chairman of the Senate Special Committee on Aging.

    Criminals use stolen personal information to file fraudulent tax returns, usually in January, before the real taxpayers have a chance to file. By the time the victims send in their returns, it’s too late: The IRS already has mailed refund checks to the identity thieves. It can take months – even years – for the IRS to untangle the mess and send the taxpayers the refunds they’re owed.

    Nine of the 10 U.S. cities hit hardest by the scam are in Florida. The Miami metropolitan area tops the list, with 35,914 cases of tax-related identity theft reported last year and the highest per capita rate of complaints, 645 per 100,000 residents.

    Miami was followed by Atlanta, which had 12,992 complaints, Tampa, Fla., with 9,805, and Orlando, Fla., with 4,991.

    Nationwide, cases of tax-related identity theft surged 650 percent from 2008 to 2012. In 2011, thieves filed 1.5 million undetected fraudulent tax returns and received $5.2 billion in refunds, according to an audit last year by the Department of the Treasury’s inspector general.

    Witness Marcy Hossli, 57, of Lake Worth, Fla., has been a victim of identity theft through tax fraud three years in a row.

    “I should never have to go through anything like this, nor should anyone else,” Hossli said. “I feel violated. It’s hard to concentrate in work. I am stressed constantly.”

    Hossli told senators she still is waiting for her 2012 tax refund. She suffers from cancer and owes $4,000 in medical bills. “I really need the money,” she said.

    Senators expressed frustration that the IRS hasn’t been able to do a better job at catching fraud even though criminals often use the same addresses to file multiple returns.

    Republican Sen. Susan Collins of Maine said thieves used the same address in Lansing, Mich., to file 2,137 tax returns, and they received $3.3 million in refunds. An address in Chicago was used to steal $900,000 in refunds through almost 800 fraudulent returns, Collins said.

    “Criminal gangs have figured out that it’s cheaper and easier for them to steal taxpayers’ identities and hijack their refunds than it is to traffic in drugs, rob banks or fence stolen property,” Collins said.

    “The IRS has an obligation that obviously they’re not meeting,” said Sen. Claire McCaskill, D-Mo. “How in the world can there not be a system in place that the IRS could not catch that they’re sending 2,000 refunds to the same address?”

    Tax refund thieves commonly target senior citizens, as well as low-income people and students, who might not be required to file returns.

    The audit by the Treasury Department’s inspector general estimated that 76,000 senior citizens likely were victims of tax fraud identity theft in 2010, resulting in $374 million in fraudulent tax refunds.

    Victims often have their identities stolen by corrupt employees at nursing homes and hospitals, Kathryn Keneally, assistant attorney general for the Department of Justice’s tax division, said in her testimony before the committee. In other cases, criminals take names from public death lists to file tax returns, she said.

    “For the public the risk is clear,” Keneally said. Such crimes “can and do arise in any setting where the lure of fast money puts at risk personal identifying information, including at state agencies, student loan providers, the military, prisons, companies servicing Medicaid programs – the list is growing all too long.”

    Postal workers have been compromised, robbed and in one case killed in order to steal refund checks, she said.

    Prosecuting tax-refund identity theft is a national priority, she added.

    Legislation Nelson introduced this week would increase jail time and fines for people convicted of tax-related identity theft and direct the IRS to close identity theft cases within 90 days. Last year, it took an average of 196 days for the IRS to close such cases.

    The delays are unacceptable, Nelson said. He said victims of identity theft shouldn’t have to wait six months for their refunds, much less two years, as at least one woman in Parkland, Fla., had to do.

    “Many Americans rely on getting those tax refunds back so they can pay their bills,” he added.

    Nelson’s bill, co-sponsored by fellow Democratic Sens. Dianne Feinstein of California and Charles Schumer of New York, also would ensure that victims don’t have to explain their plight to different IRS employees every time they contact the agency. Instead, the IRS would give each victim a single point of contact to help track the case.

    Other provisions include restrictions that would make it harder for thieves to load stolen refunds onto prepaid cards, language that allows identity theft victims to opt out of electronic filing and prohibitions on printing Social Security numbers on Medicare ID cards and communications.

    (source)

  • Tampa woman sentenced to 5½ years for tax fraud, ID theft.

    Posted on December 17th, 2012 admin No comments

    A 47-year-old Tampa woman was sentenced Wednesday to 5½ years in prison after pleading guilty in a federal tax fraud case.

    Belinda Brooks must serve 42 months for theft of government property to be followed by 24 months for aggravated identity theft, Robert E. O’Neill, U.S. attorney for the Middle District of Florida, said in a news release.

    The court also ordered Brooks to repay $118,882.63, the proceeds of her criminal activity, O’Neill said.

    According to court documents, Brooks filed a false tax return in her name, and stole the names and Social Security numbers of others, filed fraudulent tax returns in their names and obtain tax refunds for the tax years 2008 and 2009.

    She was indicted Feb. 7 on several charges, including filing a false tax return, six counts of theft of government property (tax refunds), six counts of aggravated identity theft, three counts of making false claims (fraudulent tax returns), and three counts of identity theft.

    Brooks, who was sentenced by Judge Mary S. Scriven, pleaded guilty May 25.

    (source)

  • Tampa Car Dealer Pleads Guilty in Tax Scheme

    Posted on November 26th, 2012 admin No comments

    A Tampa car dealer admitted in a plea agreement filed in U.S. District Court that he helped bilk the government out of almost $1.2 million in fraudulent tax returns.

    The document filed Tuesday followed the May arrest of 42-year-old Russell Bruce Simmons Jr. on a 32-count indictment.

    The Tampa Bay Times (http://bit.ly/Tu0tU7 ) reports Simmons agreed to plead guilty to one count of wire fraud and one count of aggravated identity theft.

    The next step is for U.S. District Judge James D. Whittemore to decide whether to accept the plea agreement.

    He faces two years on the identity theft charge and up to 20 years for wire fraud.

    The newspaper reports Simmons was accused to laundering the refunds of fellow identity thieves through Simmons Auto Sales Inc.

    (original post)

  • Feds arrest dozens in ID theft-tax fraud takedown in South Florida

    Posted on October 10th, 2012 admin No comments

    Federal agents busted dozens of South Florida suspects charged with identity theft and income tax fraud in a major assault on the epidemic crime.

    Federal authorities stepped up their assault on the viral-like crime of identity theft and tax fraud, arresting dozens of South Florida suspects — including a Miami Gardens man facing a murder trial — on charges of filing fake returns totaling millions of dollars.

    Federal prosecutors in Miami plan to unveil charges against more than 40 defendants accused of stealing the personal information of other people and using it to file fraudulent tax-refund claims with the Internal Revenue Service. U.S. Attorney Wifredo Ferrer plans to hold a news conference at 3 p.m. Wednesday to address the new charges.

    Among those arrested and charged early Wednesday: Lineten “Link” Belizaire. In August, Belizaire was charged with the Lauderdale Lakes killings of two women and a baby.

    Belizaire, 21, of Miami Gardens, pleaded not guilty in the shooting deaths of Octavia Barnett, 21; Barnett’s roommate, Natasha Plummer, 25; and Plummer’s 6-month-old boy, Carlton Stringer Jr..

    Belizaire, who was out on bond awaiting trial in Broward, was taken into custody to face ID theft and tax fraud charges in federal court.

    Wednesday’s takedown by a new South Florida task force involving the IRS, FBI and other law enforcement agencies follows a Justice Department’s Oct. 1 edict that gave authorities greater leeway to pursue tax-fraud offenders who swipe other people’s identities to fleece the federal government.

    “This takedown is big and it’s only going to get bigger,” Jose “Tony” Gonzalez, special agent in charge of the IRS’ criminal investigations unit, told The Miami Herald. “Our job is to protect the integrity of the tax system and honest taxpayers.”

    The problem is so pervasive that an inspector general for the Treasury Department recently issued a report that found the IRS paid out more than $5.2 billion in tax refunds to fraudsters who filed about 1.5 million fake returns using the stolen identities of other people.

    Among major U.S. cities with the most fraud-related tax filings: Tampa (88,724 returns, with refunds of $468,382,079); Miami (74,496 returns, with refunds of $280,509,449) and Atlanta (29,787 returns, with refunds of $77,113,392).

    Over the past year, dozens of suspects charged with theft of IDs and government funds have been convicted in Miami.

    The most high-profile case: In late August, William Joseph, a former University of Miami defensive tackle who played in the NFL for much of the past decade, pleaded guilty to tax-related fraud charges in federal court.

    Joseph and other defendants — including a former Oakland Raider teammate, running back Michael Bennett — were convicted of either cashing dozens of fraudulently obtained tax-refund checks in other peoples’ names or seeking a loan with fake collateral. Their take totaled hundreds of thousands of dollars, according to court records.

    Joseph, 32, of Miramar, cut a plea deal in hopes of reducing his potential sentence. He pleaded guilty to theft of government money and aggravated identity theft, the latter of which carries a mandatory two-year prison sentence. He admitted cashing a $10,088.27 Treasury Department refund check in the name of a person with the initials “I.P.” at a check-cashing store in North Miami in April, according to his plea agreement.

    Unbeknownst to him, the store was a front for an FBI undercover operation.

    Joseph agreed to cooperate in the ongoing investigation into tax-related fraud, according to the plea deal signed by him, his lawyer and prosecutor Michael Berger. That assistance could be a factor at his sentencing Nov. 9 before U.S. District Judge Kathleen Williams.

    Earlier this year, FBI agents faked out the two ex-NFL football players and a former local high school star by setting up the check-cashing “front” in North Miami. The undercover operation, using audio and video recordings, sacked:

    • Joseph, who was drafted in the first round by the New York Giants in 2003 and last played with the Oakland Raiders in 2010.

    Bennett, a University of Wisconsin halfback who was drafted in the first round by the Minnesota Vikings in 2001 and concluded his career with the Raiders in 2011. Bennett, 33, of Tampa, pleaded guilty to a wire fraud charge in August.

    • Louis Gachelin, a Miami Jackson High and Syracuse University defensive lineman who signed as a free agent with the New England Patriots in 2004. Gachelin never made the final roster. In July, Gachelin, 31, of Miramar, pleaded guilty to theft of government money and aggravated ID theft.

    Here’s the root of the problem: Scammers filing fabricated tax returns have exploited a hole in the IRS electronic filing system, according to the U.S. Government Accountability Office.

    The federal watchdog agency found that the Internal Revenue Service does not match tax returns to the W-2 income forms that employers file until months after the filing season ends on April 15. Employers file them in late February or early March; the IRS does not match them up with employees’ incomes reported on 1040 forms until June.

    That’s way too late to catch identity thieves who file false returns in other people’s names early in the year and have already received and cashed the refund check.

    (original post)

  • IRS boosts staff in tax refund fraud.

    Posted on September 27th, 2012 admin No comments

    TAMPA — The Internal Revenue Service is tripling the number of staff members nationwide who are dedicated to addressing the issue of identity theft tax refund fraud, U.S. Rep. Kathy Castor said.

    Castor, the Tampa Democrat, said she was briefed last Friday by IRS officials regarding progress the agency is making to tackle the epidemic of fraud in which the Tampa area leads the nation.

    Thieves use stolen personal information — such as names, dates of birth and Social Security numbers — to file tax returns with fake income information and obtain fraudulent tax refunds.

    According to a recent inspector general report, thieves in the Tampa area alone stole more than $400 billion last year from federal taxpayers this way. Nationwide, identity thieves are stealing billions from the federal government through refund fraud.

    Castor said the IRS assured her it is increasing its screening filters, designed to detect fraudulent returns before refunds are issued. Across the board, law enforcement officials have repeatedly said the fraud is so pervasive, it cannot be stopped by arrests and prosecutions — that the IRS needs to stop sending “refunds” to thieves.

    The IRS told Castor that so far this year, it has prevented 2.3 million fraudulent refunds from being issued, totaling $15 billion. That’s compared to 1.4 million fraudulent refunds stopped in 2011, worth $11 billion.

    Part of that effort apparently involves increasing scrutiny of tax filings originating from Tampa, Castor noted.

    “I said, ‘Geographically, where you know there is an epidemic, like the Tampa Bay area and the state of Florida, I assume filters are place.’ They said yes.

    “They say they’re on the cusp of instituting many, multiple new filters to prevent the fraud from happening in the first place,” Castor said.

    “So they will flag, for example, multiple returns coming to the same address. That’s a question I keep getting. How can it be that the IRS is sending multiple debit cards and returns to the same address over and over?”

    Castor also noted something police have been saying: often crooks will use the same fake numbers repeatedly on numerous returns. For example, two suspects indicted this week were accused of filing 17 tax returns, each seeking refunds of $1,453.

    The new filters, Castor says she was assured, “will flag that.”

    While Castor was encouraged by the new IRS approach, she added, “I know from the folks coming to my office with checks and calls and people I see in the grocery store, this is still a huge problem and we’ve got to continue to press the IRS until Tampa no longer is number one for tax fraud.”

    Castor said that she was told that by October, the agency will reallocate personnel to beef up the number of people dedicated to issues related to ID theft tax refund fraud. The agency will have more than 2,300 people addressing the issue, Castor said. These people are being moved from other areas and are not new hires.

    The agency anticipates that by tax season, it will issue about 500,000 personal identification numbers to identity theft victims. The PIN numbers are designed to stop victims from being further harmed by having their real returns rejected.

    The agency said it is “modernizing” its efforts to block use of information gained from the Social Security death master file, an online database of deceased individuals with their Social Security numbers and dates of birth. The data has been used extensively by refund fraud thieves.

    Castor said she was pleased to see recent efforts by the federal government to address the fraud, including a directive issued this week by the Justice Department to speed up prosecutions and the arrests of some high-profile suspects.

    The congresswoman said she spoke to the IRS about a pilot program in Florida in which identity theft victims can sign waivers giving law enforcement access to tax returns filed fraudulently in their names.

    Castor said the IRS told her it has issued 750 of those waivers.

    The amount of time it has taken the agency to address the issue is “not satisfactory at all,” Castor said. “But there are some positive signs here. We’ve got their attention.”

    (original source)

  • Investigation finds 741 tax returns filed from single Belle Glade home.

    Posted on August 30th, 2012 admin No comments

    A small South Florida city has attracted the attention of federal investigators looking into tax refund fraud and identity theft, according to an independent watchdog agency that oversees the Internal Revenue Service.

    In Belle Glade, nestled along Lake Okeechobee, 741 tax returns worth more than $1 million in refunds were filed from a single address last year, according to the Treasury Inspector General for Tax Administration.

    The Belle Glade address ranked third nationally for number of returns filed. Investigators would not release the address, citing confidentiality rules on tax returns. But House Oversight Subcommittee Chairman Charles Boustany Jr., R-La., referred to it as a home.

    Three of the top five addresses used to file potentially fraudulent returns were in Florida, the Inspector General reported.

    Tampa and Miami were mentioned as the top cities where potentially fraudulent 2010 tax returns were filed last year.

    Nationally, thieves are suspected of using the identities of 2,274 children, 105,000 dead people and almost 1 million people who don’t normally file returns to collect $5.2 billion in refunds.

    The Inspector General’s analysis found that incidents of identity theft jumped 155 percent last year.

    “The report really underscores just how bad a problem ID tax fraud is in Florida and around the country,” said U.S. Sen. Bill Nelson, who asked the Treasury Inspector General last year to investigate the extent of the problem. “It’s become an epidemic that’s costing law-abiding U.S. taxpayers billions of dollars. And it’s one we’ve got to fix. That’s why I’ve filed legislation aimed at putting a stop to these fraudsters.”

    The IRS disputed some of the watchdog’s findings, including estimates of $21 billion in potentially fraudulent tax returns in the next five years.

    Plantation IRS spokesman Mike Dobzinski said Monday that his agency “along with the Department of Justice, has significantly stepped up its activities to pursue those who attempt to steal identities to commit tax fraud.” That will help cut down on future abuse, he said.

    But Rep. Boustany was concerned that the IRS wasn’t spotting suspicious multiple filings at one address.

    In addition to the Belle Glade home, an Orlando post office box allegedly received $1,088,691 for 703 suspected fraudulent tax returns filed, he said. A home in Tampa netted even steeper refunds: It allegedly sent out 518 potentially fraudulent fake returns but collected nearly $1.8 million from Uncle Sam, Boustany said.

    David Barnes, public affairs liaison of the Treasury Inspector General for Tax Administration, said his agency “did not analyze the fraud by geographic or metropolitan location.” So he said he couldn’t comment on why the state — and South Florida in particular — leads the nation in identity theft.

    His agency’s report showed, for example, that Miami thieves allegedly submitted nearly 75,000 bogus tax returns last year and received nearly $281 million in refunds.

    It is “one of the biggest constituent problems we see in our office,” said alex Conant, a spokesman for U.S. Sen. Marco Rubio. The tax fraud “often prevents law-abiding taxpayers from receiving the tax refunds they deserve.”

    “Over the past several years my office has seen a dramatic increase in the number of individuals needing assistance because of tax refund identity theft, a clear indication this crime is becoming a big problem in South Florida,” added U.S. Rep. Debbie Wasserman Schultz, of Weston. That’s why she said she introduced a bill to help stop this problem and protect Americans.

    Florida IRS spokesman Dobzinski said his agency is working hard to stop the fraud. This January, the IRS and Justice Department worked together to press 923 charges against 105 people in 23 states.

    “To support our prevention efforts, we enhanced our return processing filters to improve our ability to identify false returns and stop fraudulent refunds from being issued,” he added.

    The IRS also established a specialized unit that analyzes and develops leads on identity theft, Dobzinski said.

    But others are skeptical with several South Florida tax preparers saying tax-related identity theft is up even more this year than last.

    “We need to know why the IRS is not catching this fraud,” Rep. Boustany said.

    (original post)

  • IRS May Have Lost Billions To Identity Theft, Treasury Says.

    Posted on August 30th, 2012 admin No comments

    The Internal Revenue Service may have delivered more than $5 billion in refund checks to identity thieves who filed fraudulent tax returns for 2011, Treasury Department investigators said on August 2, 2012. They estimate another $21 billion could make its way to ID thieves’ pockets over the next five years.

    The IRS is detecting far fewer fraudulent tax refund claims than actually occur, according to a government audit that warned the widespread problem could undermine public trust in the U.S. tax system. Although the IRS detected about 940,000 fraudulent returns for last year claiming $6.5 billion in refunds, there were potentially another 1.5 million undetected cases of thieves seeking refunds after assuming the identity of a dead person, child or someone else who normally wouldn’t file a tax return.

    In one example, investigators found a single address in Lansing, Mich., that was used to file 2,137 separate tax returns. The IRS issued more than $3.3 million in refunds to that address. Three addresses in Florida, the epicenter of the identity theft crisis, filed more than 500 returns totaling more than $1 million in refunds for each address.

    In another troubling scenario, hundreds of refunds were deposited into the same bank account – a red flag for investigators searching for ID thieves who may be filing for refunds for multiple people. In one instance, the IRS deposited 590 refunds totaling more than $900,000 into one account.

    “We found multiple reasons for the IRS’s inability to detect billions of dollars in fraud,” J. Russell George, the Treasury Department’s inspector general for tax administration, in a statement. “At a time when every dollar counts, these results are extremely troubling.”

    Topping the list of concerns is the IRS’s lack of timely access to third-party information it needs to verify returns and root out fraud.

    Many Americans are struggling to pay their bills and the IRS takes pride in processing returns and issuing refunds promptly. But taxpayers can start filing their returns in mid-January, while employers and financial institutions don’t have to submit withholding and income documents for taxpayers to the IRS until the end of March. That means the IRS often issues refunds long before it can confirm the veracity of what’s listed on taxpayer returns.

    Thieves are also exploiting vulnerabilities in the way the IRS delivers refunds, investigators found. Of the 1.5 million undetected cases of potential fraud, 1.2 million used direct deposits, including pre-loaded debit cards. Thieves often prefer those methods to a paper check, which require a physical address to receive the check and photo ID matching the taxpayer’s name to cash it.

    IRS officials said the growth of identity theft-related fraud is one of its biggest challenges. Already this year, the agency has stopped almost $12 billion in confirmed fraud, it says. And it says its criminal investigators are actively pursuing those who perpetrate fraud – including the previously undetected cases identified by the audit.

    “If the IRS determines a refund has been issued improperly, we will attempt to recoup the funds,” said IRS spokeswoman Michelle Eldridge.

    The IRS agreed with the inspector general that Congress should expand the agency’s access to resources that could help it fight theft, including the National Directory of New Hires, a database created to help states enforce child support orders. The IRS specifically asked Congress for that authority in its 2013 budget request.

    But IRS officials disputed the notion that $21 billion in fraudulent returns could be issued over the next five years, arguing that the estimate didn’t take into account the IRS’s stepped-up compliance and prevention efforts.

    “We’re going to continue to monitor the IRS in this area until we see some improvement,” Michael McKenney, the acting deputy inspector general for audit, told The Associated Press.

    Investigators went back through a sample of the 1.5 billion undetected cases to see why the IRS never flagged them as fraudulent. In 49 of 60 returns, investigators said, the return didn’t score high enough on the IRS’s fraud filter to merit a closer review. In eight of the 11 cases where the IRS did perform an additional review, it never verified the income and withholding on the return.

    The audit was prompted by a request from Florida Sen. Bill Nelson, whose home state contains the top two cities where fraudulent tax returns originate: Tampa and Miami. Last week Nelson, a Democrat, joined with Republican Sen. Tom Coburn of Oklahoma to introduce legislation designed to curb identity theft in the tax system.

    “It’s an ongoing problem,” Nelson said in a statement. “We’ve got to find a fix.”

    Nelson’s bill would improve protections for Social Security numbers that thieves need to file returns, and would expand an existing program that gives previous victims of ID theft a personal identification number to deter repeat offenses against the same taxpayer. Another bipartisan bill passed by the House on Wednesday would bolster prosecutions and strengthen criminal penalties on ID thieves.

    The IRS said it is already putting a number of new measures in place, including new ID theft screening filters that will hold on to refunds until the IRS can verify a taxpayer’s identity. That filter had thwarted about $1.3 billion in potentially fraudulent refunds through April, the audit said. Another system flags returns filed with Social Security numbers of those who have died.

    For those who fall victim to identity thieves, the recovery process can be less than smooth. A separate report by the inspector general in May found that the IRS wasn’t providing good customer service and proper assistance to victims of ID theft, increasing the burden for those whose identities are stolen. The Federal Trade Commission has listed identity theft as the No. 1 consumer complaint for the past 12 years.

    (original post)