MOORE — This weekend a new movie opened nationwide. In “Identity Thief,” a husband and father of three has his identify stolen by a crook, who maxes out his credit cards, turning him into a wanted felon.
It’s a comedy on the big screen but it’s no laughing matter for the Internal Revenue Service (IRS), which recently concluded a massive national sweep that nabbed 389 identity theft suspects in 32 states. It resulted in 109 arrests and 189 indictments.
IRS acting commissioner Steven Miller wanted to reassure citizens that the IRS is working to eliminate refund fraud caused by identity theft.
“It’s one of the biggest challenges facing the IRS today,” Miller said in a conference call this past week. “In that fight, we are doing a much better job on all fronts, but that we still have much to do. Working with other state agencies, we have to continue to increase the pressure on identity thieves.”
According to Miller, the IRS has a three-part strategy in dealing with the crime of refund fraud associated with identity theft. The first part is preventing fraudsters from receiving the refund. The second part concerns how they treat victims whose refunds are caught up in the system and how fast they can get innocent people their refunds. The third piece is enforcement is and punishment.
The January crackdown, a joint effort with the Department of Justice and local U.S. Attorneys offices, unfolded as the IRS opened the 2013 tax season. IRS Criminal Investigation expanded its efforts during January, pushing the total number of identity theft investigations to more than 1,460 since the start of the federal 2012 fiscal year.
“As tax season begins this year, we want to be clear that there is a heavy price to pay for perpetrators of refund fraud and identity theft,” Miller said. “We have aggressively stepped up our efforts to pursue and prevent refund fraud and identity theft, and we will continue to intensely focus on this area. This is part of a much wider effort underway for the 2013 tax season to stop fraud.”
In addition to the nation wide sweep, the IRS launched a special compliance effort involving “check cashing” businesses to make sure they are not helping identity or refund thieves when they cash checks.
The IRS has opened more than 900 identity theft investigations in the 2012 fiscal year. Miller said that is triple the number it was from 2011. Last year, the IRS stopped $20 billion in fraudulent refunds from being issued — up from $14 billion in the previous year. The agency also had more than 3,000 employees dedicated to prevent and investigate identity theft-related crimes by late 2012 — more than double the staffing from 2011.
Sentencings of convicted identity thieves continue to increase. There were 80 sentencings in fiscal year 2011, which increased to 223 in fiscal year 2012.
Jail time is increasing for identity thieves. The average sentence in fiscal year 2012 was four years or 48 months — a four-month increase from the average in fiscal year 2011. So far this fiscal year, sentences have ranged from 4 to 300 months.
“We’ve seen sentences as long as 262 months,” Miller said. “That’s 20 years. What this means is that we’ve increased dramatically the amount of time our special agents spend on this issue. In 2012 we spent more than a half million hours. These numbers show the IRS is very serious about pursuing identity thieves and protecting the tax paying public.”
With the number of E-filings increasing during tax season, the IRS has seen an increase in refund fraud associated with identity theft, also.
Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.
The IRS have begun issuing Identity Protection Personal Identification Numbers to tax payers who have been victimized by identity theft. It shows that a particular tax payer is rightful filer of a return. It helps avoid delays when filing returns. The IRS has issued almost 800,000 numbers for 2012.
To help taxpayers, the IRS has a special section on IRS.gov dedicated to identity theft issues, including YouTube videos, tips for taxpayers and a special guide to assistance. For victims, the information includes how to contact the IRS Identity Protection Specialized Unit. For other taxpayers, there are tips on how taxpayers can protect themselves against identity theft.
“We are strengthening our processing systems to watch for identity theft and detect refund fraud before it occurs,” Miller said. “And we continue to put more resources on helping people who are victims of identity theft and resolve these complex cases as quickly as possible. With the tax filing season now under way, we want to be clear there is a heavy price to pay for committing refund fraud or identity theft. People are going to jail for a long time as a result.”
Michael Kinney Follow me @eyeamtruth