Tax fraud gangs are not involved in drugs, graffiti, or territorial wars but in stealing people’s names, Social Security numbers, and their tax refunds. In order to get the valuable commodity, tax fraud gang members will kill. Bruce Parton was gunned down by tax fraud gang members on his daily mail route because he had what they needed; names and Social Security numbers in order to file false tax returns and rake in thousands of dollars in tax refunds.
On Feb. 17, 2013, Reuters reported that “Using stolen names and Social Security numbers, criminals are filing phony electronic tax forms to claim refunds, exploiting a slow-moving federal bureaucracy to collect the money before victims, or the Internal Revenue Service, discover the fraud.”
According to the U.S. Treasury Department, the increasing criminal activity by tax fraud gang members could cost the nation “$21 billion over the next five years.”
Wifredo Ferrer, United States Attorney for south Florida, stated that the crime has been growing by leaps and bounds during the past three years and that “It’s a tsunami of fraud.”
Florida is not the only state that is experiencing criminal activity by tax fraud gang members. So far, the IRS has found tax fraud cases in every state except North Dakota and West Virginia.
One of the reasons why Florida, especially Miami, has “46 times the per-capita rate of false tax refund claims than the rest of the country” is that seniors like to spend their retirement in a warm climate.
After stealing the names and Social Security numbers of seniors or people who just recently deceased, tax fraud gang members do what many people prefer not to do; file taxes as quickly as possible.
In 2010, when IRS agents raided a Howard Johnson hotel in East Tampa, they found quite an unusual picture. Tax fraud gang members were smoking marijuana and “churning out tax claims” on their laptops by using the tax preparation software Turbo Tax.
“The suspects had lists of personal information containing more than 1,000 names and confidential personal information, multiple re-loadable debit cards, and records of numerous financial transactions. The investigation revealed that the suspects had been camped out in the hotel room for more than a week filing claims.”
Only armed with a name and a Social Security number, tax fraud gang members can easily make up the rest of the information needed to fill out a tax return. With a little bit of imagination and some research, information like addresses, employer data, income, and deductions is an easy task. Businesses, addresses, and possible employers are provided by Google maps and the national averages are available online or by using tax software.
In order to obtain names and matching Social Security numbers, tax fraud gang members do not even need to kill.
“Criminals obtain the vital numbers using various tactics, often by bribing office workers with access to personnel files inside companies, as well as large public institutions such as hospitals and schools, according to prosecutors.”
For some tax fraud gang members, going right to the source makes the job even easier.
“Last summer a hacker stole 3.8 million unencrypted tax records from the South Carolina Department of Revenue in what is believed to be the largest security breach of a U.S. tax agency.”
So if neither one’s money nor one’s personal information is safe with the IRS, how can people protect themselves from becoming a tax fraud gang victim?
Leaving the responsibility, like one’s money, in the hands of the IRS is certainly one option. However, acting IRS Commissioner Steven Miller told reporters that preventing tax fraud gang members from stealing people’s money is “one of the biggest challenges that faces the IRS today. We’re doing much better on all fronts but we have much more to do.”
Reuters reports that while the investigations against tax fraud gang members is increasing, the IRS “still had a backlog of 300,000 cases of people waiting for legitimate refunds after they were victims of fraud.”
Since it takes the IRS an average of six months to resolve a tax fraud case, it appears that one of the best ways to fight against tax fraud gang members is to do what they do; file your taxes as soon and as quickly as possible.