Scam Victim Warns Of Tax Fraud Tactic
ELK RIVER, Minn. (WCCO) -- Tax day is days away. Tuesday, April 17th is the filing deadline this year. If you haven't sent in your return yet, one Minnesota man warns that you could be hit with quite the surprise -- someone else may file before you do.
"All I know about this guy is that he got a $2,500 refund and he is in Miramar, Florida," said Stanley Thom, of Elk River, who works commercial real estate construction.
In the eyes of the IRS, Thom is by all accounts, a predictable taxpayer. He's lived in the same Elk River home for more than a decade. He always files his taxes during the second week of March, and he relies on a long time tax accountant, who put his taxes through the usual e-file last year.
"He called up the next morning and says, 'I got a problem'. 'What's the problem?' 'It got kicked back that you already filed this year,' I said, 'no I haven't,'" said Thom, who said the IRS then advised him to send in a paper copy of his taxes.
Thom says three months passed, without a refund or reply for the IRS, and that's when he placed a call to the agency and discovered his hard earned money was instead, in someone else's hands.
"It's five figures," said Thom, referring to the refund he was counting on, the refund someone else got a hold of.
"They had filed on January 5th, it went to a Miramar Florida address, a bank, he had claimed or received a $2,500 refund in my social security number," said Thom, who isn't sure how the thief accessed his personal information. He could only think that his credit card information was stolen from the same county in Florida around a decade ago.
The IRS recently flagged Florida as a tax identity theft hotspot, and nationwide, the agency launched a crackdown after a recent surge in taxpayer identity theft.
The IRS said it stopped nearly 262,000 fake returns based on identity theft in 2011, preventing nearly $1.5 billion in refunds from going to criminals. That's nearly a fivefold spike from 2010, when the agency stopped about 49,000 fake returns that added up to $247 million in fraudulent refunds. The IRS says it's all part of their nationwide effort to stop the increasing crime, in which the agency targeted 105 people in 23 states, arresting and charging dozens of thieves.
The trending crime is also a focus at the Minnesota Department of Revenue. John Cannefax heads up the agency's criminal investigation unit and says last year his investigators stopped a little more than 2,100 fraudulent returns in Minnesota, and roughly 2.8 million in fraudulent returns from going out. That's a slight increase from two years ago, with more than 1,500 fraudulent returns when his department stopped more than one million in fraudulent returns.
"We actively look for them. There is an office in the building that reviews returns that are suspect," said Cannefax, Supervisor of the Criminal Investigations Division. "We have people that will just fire off a return with a social security number that they just thought up."
After nearly a year, Thom still found no sign of that five digit refund. He says his calls to the IRS were met with opposition, and patience wore thin, with the paperwork to prove it.
"This is a significant amount of money, and they really don't care," he said. "Each month I would get the same letter - no need to do anything further. Every time I got a different request, a different answer. In 30 days, you'll get paid, in 30 days you will get your money. At one point I asked, can I talk to someone up the chain, and the lady said no, I am as far as you can go."
Thom filed a police report and even got his Congresswoman Michele Bachmann involved, not knowing where else to turn. He says representatives from her office told him they heard about five similar cases in their district, although Bachmann's office would not confirm that information to WCCO-TV, citing citizen privacy.
Now, when he files in the future, Thom vows to do something out of the ordinary: forget the refund, and write the check himself.
"Very frustrating," he said. "I am going to take a different attitude about that, because if I had to pay in, I wouldn't have had this problem. Make sure you gotta pay in at the end of year."
The IRS said identity theft is the top crime on its "Dirty Dozen" list, saying identity theft cases are among the most complex ones the IRS handles.
The IRS says a taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS Identity Protection Specialized Unit immediately at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039.
Taxpayers can also consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS website.
The Minnesota Department of Revenue also has a 24-hour tipline for anyone to use to report an individual or business possibly breaking tax law. Tipsters can call or email and remain anonymous when reporting. (651) 297-5195, or 1-800-657-3500 (TTY users call 711 for Minnesota Relay) or tax.fraud@state.mn.us
