$4 Billion Tax Scam



A government report in November stated that the IRS issued $4 billion in falsified tax refunds created with stolen personal identification information, according to a report by the Associated Press.

In the past year 880 people have been charged by the Justice Department for taking part in a scheme whose “scale, scope, and execution” has grown exponentially, Attorney General Eric Holder said this week. In fact, just last year two men pleaded guilty to tax fraud by attempting to use the Holder’s personal information to file a false tax return.

The information is stolen in a variety of ways from all sorts of victims; children, prisoners, the elderly and even the deceased. Some information is gathered through email or “phishing” scams which tricks people into selling their own information.  One scam works by placing victims under the impression that they were entitled to “Obama Stimulus Money” or an additional tax refund.

Once social security numbers are attained, they are then used to file tax returns for the refund checks.

Assistant Attorney General Kathryn Keneally, said that refund fraud is a serious concern but that authorities are “turning a corner” in their ability to track down the criminals responsible.

Criminals like a barber shop owner in Washington who pleaded guilty last year to running a $20 million refund scam that used the information from nursing home residents, prisoners, and the dead.

Last week federal prosecutors announced charges against 25 people in south Florida for using stolen identities to claim $36 million in false tax refunds.

In Miami, the U.S. city with the most fraudulent returns, law enforcement is encouraging people and corporations in any way they can to protect their information from those looking to buy it from them.

FBI Assistant Special Agent in Charge Bill Maddalena said, “That’s the only thing we can do on our side, is just tell them to be more cautious with your information.”