IRS cracks down on identity theft, fraud

9:47 AM, Feb 13, 2013   |    comments
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WALKER, Mich. (WZZM) - Identity theft is a big problem during tax season according to the Internal Revenue Service. This year the IRS is cracking down to catch criminals.

"Identity theft is a problem in the nations tax system," said Luis Garcia, spokesperson with the IRS office in Detroit. "The main focus of this effort is to stop these criminals before they file these returns. Identity theft is a major focus and top priority with the IRS. We want to stop it before it begins."

The IRS, in a joint effort with the Department of Justice and local U.S. Attorneys offices, is taking a three-pronged strategy according to Garcia.

"To prevent these things before they ever occur. To detect them (fraudulent returns) as they come into the system so we can kick them out. And, to take care of those that are victims of identity theft," he said.

The effort began as the IRS opened the 2013 tax season. Since January, IRS criminal investigators have identified hundreds of fraud cases.

"Total enforcement actions continue to rapidly increase against identity thieves. This category covers actions ranging from indictments and arrests to search warrants. In fiscal year 2012, enforcement actions totaled 2,400 against 1,310 suspects. After just four months, in fiscal 2013, enforcement actions totaled 1,703 against 907 suspects," said Garcia.

The most common type of tax fraud that's happening is when someone obtains a victim's personal information, such as a social security number or address, and files a tax return before the victim can.

"A person who is a victim is not liable for fraud that has happened," said Garcia. The victim will get the appropriate refund but it will be delayed. The IRS says this kind of fraud not only hurts the victim but all of tax payers.

"These are rings. These are syndicates that have taken up identity theft as their job, as their criminal enterprise. Our job is to stop these guys before they continue on and steal money from all of us - money that goes into the treasury and pays for all the things we benefit from," said Garcia.

So far, this effort has stopped millions of false returns from being filed and prevented thieves from getting away with stealing more than $20 billion.

"If you are doing this, you are going to get caught and you are going to go to jail for a long time," said Garcia. "We have had arrests and indictments all over the country. Over the last year we had 2,400 different enforcement actions."

He says sentencing 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 for those successfully prosecuted is also increasing.

In fiscal year 2012, sentences ranged between 4 and 300 months. That average is to 4 years or 48 months. That is four months longer than the average jail sentence the previous year.

Garcia advises tax payers to protect themselves by being very selective of who we give our social security numbers to. He says phishing schemes are a common way for thieves to steal personal information and cautions people to never respond to any unsolicited e-mails from the IRS.

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