IRS strikes back as agents make big dent in identity theft

WASHINGTON >> The IRS strikes again: The tax company reviews that the variety of id theft victims plummeted final yr after brokers struggled for years to fight what has grow to be a multibillion-greenback business.

The variety of victims dropped by forty six %, to 376,000, the IRS stated. These taxpayers had their identities stolen by criminals who used their Social Safety numbers and birthdates to acquire fraudulent tax refunds.

The IRS stopped almost 1 million fraudulent refunds from being issued final yr. They totaled virtually $6.6 billion, the company stated.

“It’s a way more difficult time for the cybercrooks,” stated Mark Ciaramitaro, vice chairman for retail tax services at H&R Block. “All the straightforward paths have been closed.”

Id theft exploded from 2010 to 2012, and “for a time overwhelmed regulation enforcement and the IRS,” stated John Dalrymple, deputy IRS commissioner for providers and enforcement.

On the IRS, it peaked in 2014, when the company recognized greater than 766,000 victims. That very same yr, the IRS blocked 1.eight million in fraudulent refunds from being issued. They totaled $10.eight billion.

“We’ve pushed plenty of the fraud out of the system,” Dalrymple stated.

The IRS is a well-liked goal for classy id thieves as a result of the company points greater than $300 billion in tax refunds annually.

A number of years in the past, it was so simple as utilizing one other individual’s Social Safety quantity and birthdate to fill out a pretend tax return claiming an enormous refund. If thieves filed the return early within the tax submitting season — earlier than the official taxpayer — they might get refunds earlier than the IRS acquired verifying monetary info from employers, banks and brokers.

To make it simpler, thieves can get fraudulent refunds on pay as you go debit playing cards that aren’t linked to financial institution accounts.

“I feel everyone acquired caught unexpectedly by how creative the criminals have been right here,” Dalrymple stated. “I don’t assume it was simply the IRS. I feel typically, the entire concept of id theft caught everyone abruptly.”

Criminals can steal victims’ private info from hospitals, physician’s workplaces, universities, prisons — any entity that collects Social Safety numbers and birthdates.


In 2015, federal authorities broke up an enormous id theft ring in Alabama and Georgia that netted $10 million in fraudulent refunds. Among the many victims: Troopers injured in Afghanistan who have been being handled at Fort Benning’s hospital.

Final yr, authorities broke up a hoop within the District of Columbia that attempted to acquire greater than $20 million in fraudulent tax refunds. Among the many victims: individuals in assisted dwelling amenities, drug addicts and jail inmates.

In recent times, the IRS has beefed up its pc filters to id potential pretend tax returns. If there are dramatic variations in a taxpayer’s return from yr to yr, it’d get flagged for extra evaluation.


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