Tax refund scams are costing Uncle Sam as much as $10-Billiion dollars a year and current laws are not strong enough to protect Taxpayers from sophisticated Cyber-Thieves: That according to Tuesday’s Washington testimony before the Senates’ Finance Subcommittee on Fiscal Responsibility.
It was chaired by Florida Senator Bill Nelson who started off the hearing quoting a recent “CBS-4 Investigates” story on the growing problem facing local taxpayers.
Nelson said ” This is a serious crime that a a South Florida prosecutor recently described as an epidemic. People describe it as cocaine on a card, that’s what the prosecutor told a CBS affiliate in Miami”.
Washington Lawmakers just heard what CBS-4 reported right here several weeks ago: That tax refund scams are going from bad to worse and are now costing the u-s government as much as $10 billion dollars a year.
Investigators say well-organized cyber-thieves
as far away as the former soviet republic are now tapping into the IRSs’ E-File computer system.
With the help of readily available software, they can easily generate and file phony tax returns using whatever name and social security number they’ve stolen.
After hearing about the growing numbers of tax fraud investigations and arrests booming in Miami and Tampa, Nelson is now proposing increasing penalties for cyber-thieves convicted of filing fraudulent tax returns and allowing the IRS to better coordinate investigations with local Police, something they can’t do now.
Sen. Nelson adds “Clearly CBS in Miami did a great public service. I think it’s getting worse and I think it will continue to get worse and what has been uncovered in Miami and Tampa is only the tip of the iceberg”.
Over the next few months, Congress is expected to consider new laws cracking down on tax return scams.
But that won’t help the growing number of victims *this* tax season.
And todays hearing also focused on one recent victim of this latest cyber-scam who’s been waiting for the IRS to send her legitimate refund for several years now, after her Tax I-D was stolen.
According to Senator Nelson, the bill:
Strengthens penalties for tax fraud through identity theft and the improper disclosure of taxpayer information;
Gives all ID theft victims a unique personal identification number (PIN) to include on their tax return to prevent fraud and avoid tax refund delays;
Allows identity-theft victims to “opt out” of the electronic filing of their federal tax returns;
Secures the Social Security numbers of deceased Americans so that fraudsters cannot use them to file fake tax returns;
Reallocates IRS resources for tax fraud prevention and detection;
Improves coordination, cooperation, and communication between the IRS and local authorities in criminal investigations; and
Permanently extends the authority for the IRS to share information with federal and state prison authorities.
The IRS says Taxpayers who believe their refunds may have been stolen need to contact the agency as soon as possible.
Contact the IRS at 1-800-908-4490
Identity Theft Affdavit: