FBI, IRS warn about tax scams, ID theft

Tax Refund Fraud

Snip/FBI website page on Tax Fraud

At present the IRS is warning Americans about a tax scam that has targeted thousands of people amid other warnings from the FBI about ID theft. The latest scam is sophisticated.

Victims get a phone call from a person claiming to be with IRS, even giving a fake badge number. The caller may know the last four digits of your social security number, and your caller ID may show a number that appears to be coming from IRS. There may be a followup email—it’s fake too.

IRS said immigrants could be threatened with arrest or deportation if they don’t meet the caller’s demands. An agency statement said:

“Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.”

The tax agency has a list of the “Dirty Dozen Tax Scams for 2013” posted on the government website.

Tax refund fraud also creates victims when criminals steal social security numbers and other personal information, as the FBI noted:

“A Georgia woman was recently sentenced to 27 years in prison for stealing the identities of nursing home patients and using their information to apply online for about half a million dollars in fraudulent tax refunds from the Internal Revenue Service (IRS).”

The FBI also said, “The IRS has reported a significant increase in identity theft-related tax refund fraud over the past several years.”

It’s not surprising to find rampant abuse in a system for funding a government as large as that of the U.S. The criminal exploitation is partly made possible by the draconian tax code, complete with thousands of regulations most people do not understand without assistance from a tax preparer.

U.S. tax policy is based on a progressive socialist model where the government takes money to fund necessary services like national defense, but also redistributes money to the bottom quintile, and holds overpayments from working citizens who then must be issued a “refund” for a debt they did not owe to begin with. No interest is paid on such refunds.

The antiquated U.S. tax system creates a cornucopia of opportunities for criminals.

The FBI said, “Increasingly, though, tax refund fraud using stolen identities is fast becoming a favorite money-making endeavor of the criminal element.”

It is likely such fraud will increase as IRS takes over duties and regulatory enforcement of the healthcare taxes levied in the PPACA/Obamacare tax bill.

In a warning issued about the latest tax scam, an IRS official said the agency’s first contact with taxpayers on a tax issue is likely to occur via mail.

If you don’t owe taxes and you’re contacted by someone you believe to be a fraudster, IRS said you should call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.

More information about the latest tax scam is posted on the IRS website.

(Analysis by Kay B. Day/March 21, 2014)

About Kay Day

Kay B. Day is a freelance writer who has published in national and international magazines and websites. The author of 3 books, her work is anthologized in textbooks and collections. She has won awards for poetry, nonfiction and fiction. Day is a member of the American Society of Journalists and Authors and the Authors Guild.

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3 Responses to FBI, IRS warn about tax scams, ID theft

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