Carolina Journal’s Don Carrington reports here on tax fraud season.
As income-tax filing season for the 2013 tax year reaches its peak, billions of dollars in fraudulent refunds continue to flow to scam artists using stolen or fabricated identities and fake dependents to take advantage of a major loophole in the way the federal government issues refunds to individuals. The IRS says it is catching some of the perpetrators, but its enforcement efforts are hindered by political pressure to issue tax refunds before the agency can verify the identities of tax filers.
Officials from the North Carolina Department of Revenue say they are taking measures to catch the tax crimes, formally known as Stolen Identity Refund Fraud, but some flaws remain in the agency’s procedures dealing with SIRF. For example, NCDOR recently sent an interest income notice to a “taxpayer” in Durham several months after Carolina Journal notified NCDOR that the “taxpayer” did not live in Durham and her identity had been invented by fraudsters.
Fraud continues to get past tax authorities in other states as well. In March 2013, Sanford resident Martha Underwood found an envelope in her mailbox she said contained a state income tax refund check from Maryland. The envelope was addressed to the home on Westcott Circle where she and her husband had lived for five years, but the name of the addressee was Hispanic-sounding, and she did not know the addressee.
Underwood contacted CJ in January. She had read a CJ story about a Union County homeowner who had found in his mailbox an IRS check for $8,315 made out to Ray L. Rodriguez Morales. The street address was the homeowner’s, but Morales didn’t live there. That homeowner contacted CJ because he had also read earlier CJstories about SIRF schemes.
Underwood said she did not open the envelope but kept it, trying to figure out what to do with it. A week later she wrote on the envelope: “This is fraud. Doesn’t live here.” She dropped it off at her local post office.
A few weeks later, she was working outdoors when she witnessed a late model van full of people stop at her neighbor’s mailbox. “Two men got out and went through the mailbox retrieving what appeared to be two items. They gave a victory shout and jumped back in the van. The driver burned rubber on the way out of my street,” she recalled. “I later asked my neighbor if she was missing any bills or other mail, and she said no.”
“I didn’t know anything about this until I read about it in Carolina Journal. If it is happening in Sanford, Durham and the other places you have documented, it is probably happening everywhere,” she said.
“Tax fraud is not just taking my address and someone else’s Social Security Number, it is theft of public money, of every taxpayer’s contribution to the well being of the state and nation,” she said.
Be sure to read the entire report here.
