Carolina Journal investigative reporter Don Carrington reports that a tax fraud scheme that appears to have been operating in Durham is widespread.
It’s called SIRF, stolen identity refund fraud, and it affects an untold number of innocent taxpayers, costing the federal government billions. It relies on two weaknesses in the operations of the Internal Revenue Service: its desire to get returns to taxpayers quickly, and a timing gap in how it deals with employees and employers.
In short, criminals file fake tax returns in the name of a taxpayer, but do it before the real taxpayer gets around to it. Then, the IRS, in an effort to provide good service, sends a refund check to the criminal before it learns from employers if the refund actually is warranted.
As reported at Carolina Journal Online in March, and in Carolina Journal’s April print edition, a Durham retiree found that his mailbox was being used as a drop box for people engaged in tax fraud. He had received tax refund checks from Maryland and tax correspondence from the state of South Carolina.
It turns out that this was not an isolated incident. Since the earlier stories by CJ, the Durham retiree has received more tax mailings, including a federal tax refund check for $4,000 made out to someone who doesn’t live at his address. Additionally, two neighbors have reported receiving tax correspondence and checks to people who do not live at their addresses.
