Archive for January, 2013

Fort Lauderdale woman faces 351 years in prison in tax fraud scheme – Sun

Wednesday, January 30th, 2013

A Fort Lauderdale woman was convicted of heading an identity theft tax fraud scheme that netted $11 million in federal tax refunds and involved the filing of approximately 2,000 fraudulent tax returns, federal prosecutors said.

Alci Bonannee, 36, of Fort Lauderdale, faces a prison sentence of up to 351 years as the primary leader in the identity theft ring, prosecutors said.

Between December 2010 and June 2012, Bonannee was one of several people who submitted thousands of tax returns to the IRS using identities stolen from unsuspecting victims, authorities said. The Department of Treasury paid out millions into bank accounts controlled by Bonannee and accomplices.

Bonannee and the others then withdrew the funds in cash, prosecutors said.

Law enforcement officers searched Bonannee’s home and found a notebook and folder containing more than 1,000 names, dates of birth and Social Security numbers belonging to identity theft victims, court records related to the case show.

Bonannee was convicted Monday of one count of conspiracy to defraud the government, nine counts of filing false claims in violation, nine counts of aggravated identity theft and fourteen counts of wire fraud, according to federal prosecutors.

Bonannee is scheduled to be sentenced on April 26. Her accomplice, Chante Mozley, pleaded guilty to conspiracy to file fraudulent claims on Jan. 9 and faces a prison sentence of up to 10 years. Sentencing is scheduled for March 28. 

Sonyini Clay, another accomplice, pleaded guilty to conspiracy to file fraudulent claims and aggravated identity theft on Jan. 14 and faces a prison sentence of up to 12 years.  Sentencing for Clay is scheduled for April 26. 

ijrodriguez@tribune.com; 954-356-4605 or @GeoRodriguez on Twitter Instagram

Article source: http://www.sun-sentinel.com/news/broward/fort-lauderdale/fl-lauderdale-tax-fraud-conviction-20130129,0,3486742.story

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Officials investigate possible ID theft of state Senate President Andy Biggs

Wednesday, January 30th, 2013

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Article source: http://www.azcentral.com/community/gilbert/articles/20130128officials-investigate-possible-id-theft-of-state-senate-president-andy-biggs.html

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Officials investigate possible ID theft of state Senate President Andy Biggs

Wednesday, January 30th, 2013

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Article source: http://www.azcentral.com/community/gilbert/articles/20130128officials-investigate-possible-id-theft-of-state-senate-president-andy-biggs.html

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IRS Tips Won’t Protect You From Identity Theft Tax Fraud

Wednesday, January 30th, 2013

10 Ways To Become A Victim Of Tax Identity Theft

With the tax return filing season about to begin, the Internal Revenue Service last week offered seven tips on how to protect yourself from becoming a victim of tax related identity theft. They ranged from “don’t carry your Social Security card” to “don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.”  By all means you should follow such advice, just as you should floss every day. Just don’t expect either flossing or the IRS tips to protect you from the current tsunami of tax related identity theft.

The fraudsters engaged in what the government calls “stolen identity refund fraud” submit large numbers of bogus returns electronically in the hopes that some of them will get through the IRS’ security screens. So rather than steal identities wallet by wallet, or computer by computer,  they lift names and Social Security numbers by the dozens, or the  hundreds, or the thousands, often with the help of corrupt insiders with access to personal data, including tax preparers, health care billing clerks, state employees and debt collectors. Talk about big numbers—prosecutors say that while working  in a North Miami law firm in 2010 and 2011, Rodney Saintfleur, 28,  misused Reed Elsevier’s Lexis Nexis database to attach Social Security numbers to 26,000 names that co-conspirators involved in refund fraud had given him.  (Saintfleur pleaded guilty in November and is scheduled to be sentenced next month.)

“It’s relatively inexpensive. You can get somebody to steal some names…and you can ping our system, and if it doesn’t go through, big deal,’’ National Taxpayer Advocate Nina E. Olson observes. For the most part, this isn’t sophisticated cybercrime. One North Carolina man broke into a local Jackson Hewitt Tax Service office and stole 300 clients’ files to use for refund fraud. A part time data entry clerk at the IRS’ Fresno, Ca. Service Center, instead of entering the data from 68 papers 1040s into the IRS’ computers, allegedly stole the returns and used them to file for phony refunds.

Some of these schemes sound simply too hokey to work. According to a criminal complaint filed last year in the Montgomery, Ala. federal court, during the 2011 tax filing season, 650 tax returns were all transmitted from a single IP address at  the home of Antoinette Djonret, with more than 400 of the returns claiming a tax refund of exactly $1,300  and every tax return claiming the taxpayer received wages from, and had taxes withheld by Wal-Mart.  Yet according to a later indictment, Djonret and her co-conspirators managed to get 80o refunds, worth more than $1.2 million, delivered to WalMart MoneyCards and other pre-paid debit cards.  Djonret entered a guilty pleas in October and a new indictment, unsealed just today, charges another woman supplied Djonret with names from Alabama state databases over a two and a half year period, ended in April 2012.

Some fraudsters use Intuit’s TurboTax to complete and electronically submit the returns, others rely on assistance from corrupt tax preparers. Indeed, the need to curb identity theft is one reason, the IRS argued in a court filing last week, that it should be allowed to continue registering hundreds of thousands of return preparers (and requiring them to pass a criminal background check) while it appeals a district court judge’s ruling that it lacks legal authority regulate preparers.

The numbers are staggering. According to Congress’ Government Accountability Office, the IRS detected 642,000 cases of identity theft in the first nine months of  2012, up from 242,000 in  all of 2011. And that 2012 number, big as it is, doesn’t include 436,000 fraudulent refund claims filed in 2012 using the Social Security numbers of Puerto Rican citizens, who don’t have to file with the IRS or pay federal taxes unless they have income from the states. While there’s no way of knowing how many stolen ID claims aren’t detected, the Treasury Inspector General for tax Administration estimated in July that 1.5 million bogus returns claiming $5.2 billion in refunds getting through a year. (The IRS said in response that it believes that fraud prevention measures it put in place in 2012 make the TIGTA estimate too high.)

Regardless of the exact number, the fraudsters are exploiting the fact that the IRS doesn’t process the W-2s and 1099s it gets for taxpayers until well after it pays out refunds. So an ID thief in possession of a valid name and Social Security number can create phony W-2s and apply for a refund of make-believe withholding, or for a refundable credit, such as the earned income tax credit, worth thousands of dollars. The bogus claim won’t go through, however, if the real taxpayer has already filed his return for a year.

That’s one reason that in the early days of this epidemic a main source of names for the crooks was the Social Security Death Index—a government maintained database, which had been available free on genealogy research sites and had included the full name, Social Security number, date of birth and death and the last address on record.  (See IRS Pays Refunds To 5,000 Dead People). The IRS is now getting more timely updates from the Social Security Administration and blocking electronic refund requests for those accounts, with the SSA has reduced some of the information, including addresses, on the index.

So the crooks have moved on, using the identities of all sorts of living folks. Taxpayers who earn too little to file—the disabled, welfare recipients, even prisoners—are favored targets. But they’re hardly the only ones. In an affidavit in a Florida case, an FBI agent noted that military personnel serving in combat zones make attractive targets since they don’t have to file their 1040s until 180 days after they leave the combat zone, meaning the crooks can be reasonably sure they’ll get their refund claims in first.

Sure, sometimes people do become victims after being duped into giving up personal information. New York state law enforcers last year busted a scheme in which more than 250 people from 30 states were tricked into volunteering their Social Security numbers and birth dates in response to phony job and apartment listings on Craigslist. But that’s the exception. For the most part, those who have their identities stolen for tax purposes haven’t been naïve or careless.  As the IRS suggests, you shouldn’t give your Social Security number to a business just because it asks for it. But a lot of hospitals and doctors won’t treat you without a Social Security number; and the number is used on the insurance cards carried by 52  million Medicare recipients, making it nearly impossible for most Americans to protect themselves from dishonest medical billing clerks.

Those taxpayers who have their tax IDs stolen can be in for a long wait for their refunds and potentially frustrating interactions with the IRS. (Callers to the IRS last year waited an average of 17 minutes to get through to a human being.) In a government sentencing memo  arguing for a long term for a woman who had stolen IDs of student loan borrowers through her job as a customer service rep for loan processor EDS (now HP Enterprise Services), federal prosecutors from the Middle District of Alabama noted that victims testified at her 2011 trial about their “seemingly endless struggles with the IRS, as they continue to wait for their legitimate tax refunds and continue to explain away the negative marks on their credit reports as they live their everyday lives.”

The IRS has dramatically ramped up its efforts to both curb ID theft and help victims (even, it says, at the expense of  enforcement and service initiatives). Last year the IRS’ Criminal Investigation unit started 898 ID theft investigations, up from 276 the year before. But it still takes about six months to resolve a typical case (and for the victim to get his or her legitimate refund). Olson, whose  office helps individual taxpayers deal with IRS problems, reports that some cases last year took as long as 300 days to resolve.  “It’s appalling,’’ she says. Beyond delayed refunds, victims can have other problems with the IRS. For example, if they’re selected for an audit, the notice will be sent to the last address the IRS has on record—which could be the one provided by the crooks. (For what about what to do if you suspect you’re the victim of tax refund identity theft, go the IRS’ Identity Theft resource center here.)

Among its initiatives, the IRS is now issuing ID theft victims  special  Identity Protection Personal Identification Numbers  (IP PINs), that allow them to distinguish themselves from the fraudsters and get their tax refunds processed.  Unfortunately, points out Olson, you can’t get one of these numbers until the IRS has finished its lengthy investigation and established you—not the crook—are the rightful owner of a Social Security number. (At an American Bar Association Section on Taxation meeting Saturday, an IRS official said nearly 750,000 taxpayers have been given IP PINs for this filing season, Tax Notes reported.)

Eventually, Olson says, as the IRS gets better at detecting phony claims before they’re paid, the fraudsters “will look for some other criminal opportunity that is less hard work.” But that’s not yet the case and this year, she predicts, could mark the peak of the epidemic, before it’s contained.

 As IRS Tax Filing Season Begins, There’s Bad News For Honest Taxpayers

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Article source: http://www.forbes.com/sites/janetnovack/2013/01/29/irs-tips-wont-protect-you-from-identity-theft-tax-fraud/

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IRS Tips Won’t Protect You From Identity Theft Tax Fraud

Wednesday, January 30th, 2013

10 Ways To Become A Victim Of Tax Identity Theft

With the tax return filing season about to begin, the Internal Revenue Service last week offered seven tips on how to protect yourself from becoming a victim of tax related identity theft. They ranged from “don’t carry your Social Security card” to “don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.”  By all means you should follow such advice, just as you should floss every day. Just don’t expect either flossing or the IRS tips to protect you from the current tsunami of tax related identity theft.

The fraudsters engaged in what the government calls “stolen identity refund fraud” submit large numbers of bogus returns electronically in the hopes that some of them will get through the IRS’ security screens. So rather than steal identities wallet by wallet, or computer by computer,  they lift names and Social Security numbers by the dozens, or the  hundreds, or the thousands, often with the help of corrupt insiders with access to personal data, including tax preparers, health care billing clerks, state employees and debt collectors. Talk about big numbers—prosecutors say that while working  in a North Miami law firm in 2010 and 2011, Rodney Saintfleur, 28,  misused Reed Elsevier’s Lexis Nexis database to attach Social Security numbers to 26,000 names that co-conspirators involved in refund fraud had given him.  (Saintfleur pleaded guilty in November and is scheduled to be sentenced next month.)

“It’s relatively inexpensive. You can get somebody to steal some names…and you can ping our system, and if it doesn’t go through, big deal,’’ National Taxpayer Advocate Nina E. Olson observes. For the most part, this isn’t sophisticated cybercrime. One North Carolina man broke into a local Jackson Hewitt Tax Service office and stole 300 clients’ files to use for refund fraud. A part time data entry clerk at the IRS’ Fresno, Ca. Service Center, instead of entering the data from 68 papers 1040s into the IRS’ computers, allegedly stole the returns and used them to file for phony refunds.

Some of these schemes sound simply too hokey to work. According to a criminal complaint filed last year in the Montgomery, Ala. federal court, during the 2011 tax filing season, 650 tax returns were all transmitted from a single IP address at  the home of Antoinette Djonret, with more than 400 of the returns claiming a tax refund of exactly $1,300  and every tax return claiming the taxpayer received wages from, and had taxes withheld by Wal-Mart.  Yet according to a later indictment, Djonret and her co-conspirators managed to get 80o refunds, worth more than $1.2 million, delivered to WalMart MoneyCards and other pre-paid debit cards.  Djonret entered a guilty pleas in October and a new indictment, unsealed just today, charges another woman supplied Djonret with names from Alabama state databases over a two and a half year period, ended in April 2012.

Some fraudsters use Intuit’s TurboTax to complete and electronically submit the returns, others rely on assistance from corrupt tax preparers. Indeed, the need to curb identity theft is one reason, the IRS argued in a court filing last week, that it should be allowed to continue registering hundreds of thousands of return preparers (and requiring them to pass a criminal background check) while it appeals a district court judge’s ruling that it lacks legal authority regulate preparers.

The numbers are staggering. According to Congress’ Government Accountability Office, the IRS detected 642,000 cases of identity theft in the first nine months of  2012, up from 242,000 in  all of 2011. And that 2012 number, big as it is, doesn’t include 436,000 fraudulent refund claims filed in 2012 using the Social Security numbers of Puerto Rican citizens, who don’t have to file with the IRS or pay federal taxes unless they have income from the states. While there’s no way of knowing how many stolen ID claims aren’t detected, the Treasury Inspector General for tax Administration estimated in July that 1.5 million bogus returns claiming $5.2 billion in refunds getting through a year. (The IRS said in response that it believes that fraud prevention measures it put in place in 2012 make the TIGTA estimate too high.)

Regardless of the exact number, the fraudsters are exploiting the fact that the IRS doesn’t process the W-2s and 1099s it gets for taxpayers until well after it pays out refunds. So an ID thief in possession of a valid name and Social Security number can create phony W-2s and apply for a refund of make-believe withholding, or for a refundable credit, such as the earned income tax credit, worth thousands of dollars. The bogus claim won’t go through, however, if the real taxpayer has already filed his return for a year.

That’s one reason that in the early days of this epidemic a main source of names for the crooks was the Social Security Death Index—a government maintained database, which had been available free on genealogy research sites and had included the full name, Social Security number, date of birth and death and the last address on record.  (See IRS Pays Refunds To 5,000 Dead People). The IRS is now getting more timely updates from the Social Security Administration and blocking electronic refund requests for those accounts, with the SSA has reduced some of the information, including addresses, on the index.

So the crooks have moved on, using the identities of all sorts of living folks. Taxpayers who earn too little to file—the disabled, welfare recipients, even prisoners—are favored targets. But they’re hardly the only ones. In an affidavit in a Florida case, an FBI agent noted that military personnel serving in combat zones make attractive targets since they don’t have to file their 1040s until 180 days after they leave the combat zone, meaning the crooks can be reasonably sure they’ll get their refund claims in first.

Sure, sometimes people do become victims after being duped into giving up personal information. New York state law enforcers last year busted a scheme in which more than 250 people from 30 states were tricked into volunteering their Social Security numbers and birth dates in response to phony job and apartment listings on Craigslist. But that’s the exception. For the most part, those who have their identities stolen for tax purposes haven’t been naïve or careless.  As the IRS suggests, you shouldn’t give your Social Security number to a business just because it asks for it. But a lot of hospitals and doctors won’t treat you without a Social Security number; and the number is used on the insurance cards carried by 52  million Medicare recipients, making it nearly impossible for most Americans to protect themselves from dishonest medical billing clerks.

Those taxpayers who have their tax IDs stolen can be in for a long wait for their refunds and potentially frustrating interactions with the IRS. (Callers to the IRS last year waited an average of 17 minutes to get through to a human being.) In a government sentencing memo  arguing for a long term for a woman who had stolen IDs of student loan borrowers through her job as a customer service rep for loan processor EDS (now HP Enterprise Services), federal prosecutors from the Middle District of Alabama noted that victims testified at her 2011 trial about their “seemingly endless struggles with the IRS, as they continue to wait for their legitimate tax refunds and continue to explain away the negative marks on their credit reports as they live their everyday lives.”

The IRS has dramatically ramped up its efforts to both curb ID theft and help victims (even, it says, at the expense of  enforcement and service initiatives). Last year the IRS’ Criminal Investigation unit started 898 ID theft investigations, up from 276 the year before. But it still takes about six months to resolve a typical case (and for the victim to get his or her legitimate refund). Olson, whose  office helps individual taxpayers deal with IRS problems, reports that some cases last year took as long as 300 days to resolve.  “It’s appalling,’’ she says. Beyond delayed refunds, victims can have other problems with the IRS. For example, if they’re selected for an audit, the notice will be sent to the last address the IRS has on record—which could be the one provided by the crooks. (For what about what to do if you suspect you’re the victim of tax refund identity theft, go the IRS’ Identity Theft resource center here.)

Among its initiatives, the IRS is now issuing ID theft victims  special  Identity Protection Personal Identification Numbers  (IP PINs), that allow them to distinguish themselves from the fraudsters and get their tax refunds processed.  Unfortunately, points out Olson, you can’t get one of these numbers until the IRS has finished its lengthy investigation and established you—not the crook—are the rightful owner of a Social Security number. (At an American Bar Association Section on Taxation meeting Saturday, an IRS official said nearly 750,000 taxpayers have been given IP PINs for this filing season, Tax Notes reported.)

Eventually, Olson says, as the IRS gets better at detecting phony claims before they’re paid, the fraudsters “will look for some other criminal opportunity that is less hard work.” But that’s not yet the case and this year, she predicts, could mark the peak of the epidemic, before it’s contained.

 As IRS Tax Filing Season Begins, There’s Bad News For Honest Taxpayers

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Article source: http://www.forbes.com/sites/janetnovack/2013/01/29/irs-tips-wont-protect-you-from-identity-theft-tax-fraud/

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Md. Brothers Indicted in Identity Theft, Tax Fraud

Tuesday, January 29th, 2013

GREENBELT, Md. — Two brothers have been indicted in an alleged scheme that stole identities to prepare and file false tax returns.

Twenty-eight-year-old Ewdy Jose Olivo of Rockville and 30-year-old Juan Manuel Olivo of Hyattsville were indicted Monday.

The Olivos owned and operated Oligil Tax Services in Silver Spring. According to the 18-count indictment, the brothers stole Social Security numbers and other identifying information from others.

Prosecutors say many of the alleged victims were residents of Puerto Rico, who are not required to file federal income tax returns if all of their income came from Puerto Rican sources. Authorities say the Olivo brothers filed false tax returns in Maryland and received tax refunds.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Article source: http://washington.cbslocal.com/2013/01/28/md-brothers-indicted-in-identity-theft-tax-fraud/

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The Social Media Identity Theft of a School Director Via Twitter

Tuesday, January 29th, 2013

We’ve seen this before and it never ends good. This time it’s resulting in an identity theft charge  for Ira Trey Quesenberry III, an 18-year-old student at Sullivan Central High School. A few years ago this would have been looked upon as a victimless prank. But times have changed and as social media sites like Twitter, Facebook, LinkedIn and others have morphed into much more than just recreational websites, it’s not just unacceptable; it’s a crime.

The Twitter account was created with the name and photo of Dr. Jubal Yennie, director of the Sullivan County school district. The account has since been deleted but the tweets sent in Yennie’s name were reported to be of an embarrassing nature and not appropriate for a school administrator. Why would an 18 year old do something like that?

The Smoking Gun reports, “Yennie contacted sheriff’s deputies last Friday to report the phony Twitter account. After investigators linked Quesenberry to the account, the teen reportedly confessed to opening it. Quesenberry was booked today by sheriff’s deputies, and is due to appear tomorrow in General Sessions court.”

Grab your/companies name/products/services, people. Sites like Knowem.com will do this for free or for a small fee. The worst thing you can do is nothing. There are millions of 18-year-olds out there to make you look stupid-er.

Robert Siciliano, personal security and identity theft expert and Advisory Board member to Knowem. He is the author of 99 Things You Wish You Knew Before Your Mobile was Hacked! See him knock’em dead in this identity theft prevention video. Disclosures.

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Article source: http://www.huffingtonpost.com/robert-siciliano/highschooler-goes-social-media_b_2550541.html

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Refunds Seen Postponed in IRS Quest to Stamp Out ID Theft

Tuesday, January 29th, 2013

Some taxpayers seeking a quick
refund may have to wait longer than usual this year as the
Internal Revenue Service tries to stop criminals who steal
others’ identities and file fraudulent returns.

The agency, which begins accepting 2012 returns tomorrow,
is making its automated system more sensitive to signs of
potential fraud, meaning some returns will get a closer look.
Last year, the IRS prevented $20 billion in fraudulent refunds
from being issued, up from $14 billion the previous year.

The tax agency’s efforts to combat identity theft reflect
the tension in the IRS’s multiple missions, said Benson
Goldstein, a senior technical manager at the American Institute
of Certified Public Accountants in Washington.

The IRS has been trying to shorten processing times to
accelerate refunds, in part to encourage electronic filing and
in part to reduce taxpayers’ reliance on short-term loans. The
speed of refunds presented an opportunity for fraud.

“It’s a difficult responsibility for the IRS,” said
Goldstein, who said some legitimate taxpayers may have their
refunds delayed. “They’re there to get the prompt refunds but
at the same time to protect the U.S. Treasury.”

The IRS expects to meet its goal of delivering 90 percent
of refunds within 21 days, Michelle Eldridge, a spokeswoman for
the agency, said in an interview yesterday. That compares with
months of waiting for taxpayers who are victims of identity
theft.

The agency is trying to be careful and “underpromise and
overdeliver,” said John Hewitt, founder and chief executive
officer of Liberty Tax Service, part of JTH Holding Inc. (TAX), based
in Virginia Beach, Virginia.

Delayed Refunds

The IRS has long delayed refunds to prevent fraud, Hewitt
said. This year’s efforts, combined with an expected flood of
returns because of late congressional action that delayed the
start of filing, may slow refunds by about a week, he said.

Taxpayer identity theft has become more prevalent in the
past few years. For fiscal 2012, the IRS’s identity-theft unit
received about 450,000 cases, up 78 percent over the previous
year, according to the National Taxpayer Advocate, an
independent organization within the agency.

Using Social Security numbers illegally obtained from
sources such as doctors’ offices and payroll departments,
criminals generate fake wage reports and false tax returns. They
focus on the start of the tax-filing season, seeking to deposit
refunds on a disposable debit card or convert them into cash
before legitimate taxpayers file.

“It’s a lot easier and safer for a criminal to not use a
gun and go out and rob a bank,” Goldstein said. “It’s much
easier to use a computer and it’s safer for you.”

Fraud Prevention

Taxpayers whose identities are stolen sometimes wait months
for their refunds and go through what the National Taxpayer
Advocate
calls “a journey through IRS processes and procedures
that may take years to complete.”

The advocate, members of Congress, the agency’s inspector
general and watchdog groups have been calling on the IRS to do
more to prevent refund fraud and assist victims.

In its annual report last year, the IRS Advisory Council
said it was “concerned that both taxpayers and the tax system
will suffer if appropriate measures are not taken quickly and
effectively to control this fraud.”

It recommended that the IRS withhold three-quarters of
refunds until it can verify taxpayers’ identities.

For some U.S. households, a tax refund is the biggest
financial event of the year. In 2012, 74.4 percent of tax filers
received refunds, which averaged $2,803.

‘Tighten’ Timeline

Ann Esarco, a former member of the council, said the
government should require W-2 wage reports to be filed sooner.
The deadline for the reports is Feb. 28, creating a gap during
which the IRS has difficulty matching information it receives
from taxpayers with reports from employers.

“Somehow we have to tighten that timeline,” said Esarco,
an accounting instructor at McHenry County College in Crystal
Lake, Illinois.

This year, the IRS is introducing more of what it calls
filters to stop fraudulent refunds from being issued. Those are
rules the agency’s computers use to analyze returns and
determine if they warrant more scrutiny. The IRS doesn’t
disclose details to avoid giving criminals information.

“We have more of them in place this year and we’ve
improved the quality of them,” Eldridge said, describing
identity theft as a “top priority” for IRS. “As we get
smarter, the identity thieves find ways to try new things.”

Esarco said the IRS is improving how it flags the returns
of dead people who will need to have a final tax return filed
for 2012.

Criminal Investigations

Beth Tucker, a deputy IRS commissioner, told a
congressional subcommittee last year that the agency was
targeting bank accounts or addresses receiving multiple tax
refunds.

The IRS said it had more than 3,000 employees focused on
identity theft in late 2012, more than double the number a year
earlier. Also, it said it has tripled the number of criminal
investigations of identity theft and begun sharing information
with local law enforcement agencies in nine states.

Taxpayers who think they are the victims of identity theft
can contact the IRS at 1-800-908-4490, extension 245.

Eldridge, the IRS spokeswoman, said identity theft cases
are particularly complex to resolve.

“We know that this is frustrating for victims,” she said.
“We have been able to take some steps to try to close those
quicker, but it’s still not quick enough.”

To contact the reporter on this story:
Richard Rubin in Washington at
rrubin12@bloomberg.net

To contact the editor responsible for this story:
Jodi Schneider at
jschneider50@bloomberg.net

Article source: http://www.bloomberg.com/news/2013-01-29/refunds-seen-postponed-in-irs-quest-to-stamp-out-id-theft.html

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Reminder about online identity theft

Tuesday, January 29th, 2013

A reminder to protect your identity from thieves and scammers.

No one is immune. If you use the Internet, you have a digital footprint. The Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) reminds everyone to be aware of their digital safety. Sandy Chalmers is Division Administrator for Trade and Consumer Protection. “Identity theft happens every day. People unintentionally make it easy for for cyber thieves to steal their online data.”

Data Privacy Day is an annual international day of awareness that aims to empower people to protect their privacy and control their digital footprint. This educational effort is significant for everyone from individuals to businesses to government agencies in order to identify data privacy risks and to counteract the threats. “Probably the most important thing that people can do … is to use a long, strong, and complex password. That’s the first line of defense against cyber thieves.”

The strong password is especially important for email accounts, because password retrieval for other accounts go to that email inbox. Whether you are shopping, conducting financial transactions, searching for information, listening to music or social networking, you are leaving traces of your activities online.

Chalmers says it’s important to minimize the risk of having your personal data lost, stolen or misused. “It costs the average ID theft victim 12 hours and more than $300 to resolve fraud.” That’s an average.

Chalmers says in the worst case scenario, your personal information is sold on the black market. Quite often an identity victim is repeatedly victimized until eventually having to get a new Social Security number.

In order to help Wisconsin consumers learn about ways to tighten the security around their digital activities, DATCP is marking Data Privacy Day on Monday, January 28th. Online safety tips include: using strong passwords, protecting digital devices with updated operating systems and anti-virus software, looking for secure websites (https), getting an annual credit report, checking bank statements regularly, adjusting privacy settings on social media sites, and being wary of suspicious email.

AUDIO: Jackie Johnson report 1:57

DATCP online safety tips:

· Strong passwords.
· Protect your devices with updated operating systems and anti-virus software to stave off viruses and hackers.
· Look for secure websites that start with “https” (the “s” means secure).
· Annual credit reports. www.annualcreditreport.com.
· Check your statements regularly.
· Check your privacy settings on social media sites.
· Be wary of suspicious email

On the web:

DATCP web
DATCP eMail
DATCP Hotline toll-free at 1-800-422-7128
DATCP Facebook
Stay Safe Online
Annual Credit Report

Article source: http://www.wrn.com/2013/01/reminder-about-online-identity-theft/

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Tax Identity Theft Explodes Along With Taxpayer Frustrations

Tuesday, January 29th, 2013

Until recently, he notes, in the case of a discrepancy the IRS would simply contact the alleged thief and ask them to verify that they were the legitimate taxpayer, leaving the real taxpayer forced to verify — again and again —that they really are who they say they are. (Read More: Busch: Could a Chicago ‘Quirky’ Democrat Help Rebuild the GOP?)

“To their credit, they recently changed this,” George said.

IRS spokeswoman Michele Eldridge denies the agency has been caught flat-footed by the sudden growth of identity theft.

“IRS takes refund fraud and identity theft very seriously,” Eldridge said in an interview. “We’ve gotten a lot better at being able to protect and prevent the refund fraud, from when it hits the door.”

Eldridge said the agency has employed a number of “filters” to detect fraudulent returns. She declined to offer specifics that might offer a road map for thieves.

In Congressional testimony in November, Deputy IRS Commissioner Beth Tucker said in the first ten months of 2012, the agency “protected approximately $20 billion of revenue related to fraudulent returns, including identity theft.”

The IRS is also working more closely with criminal prosecutors.

The Justice Department’s Tax Division, which historically has focused on offshore tax havens and other forms of tax evasion, now lists tax identity theft among its top priorities.

Assistant U.S. Attorney General Kathryn Keneally said identity thieves view the fraud as a “low risk, high reward crime.”

“Our absolute goal is to alter that equation, through law enforcement activities, through prosecutions and our investigations, to make it clear that if you do this, you’re going to prison,” Keneally said in an interview.

She said the department has brought a number of successful cases, often getting stiff sentences “in excess of 25 years.”

The IRS reports criminal investigations tripled last year from the year before, with nearly 900 investigations and nearly 500 indictments.

“That’s how we’re going to alter the equation,” she said.

Still, investigators are battling with thieves for the upper hand.

“What we are seeing and combating are increasingly sophisticated networks, where instead of having one person just sit there and do the returns and collect the money, we’ve seen these networks. And with any business that you leverage, you can grow,” Keneally said.

Compounding the problem is the sheer amount of data about taxpayers that can be readily available to thieves.

“The reality here is that very often what this crime involves are entire lists of identity information, often taken from some of the most vulnerable parts of society. Hospitals. Nursing homes. Death lists. Prisons,” Keneally said.

The McClungs believe identity thieves got their daughter’s Social Security number from a “death master file” published by the Social Security Administration and updated weekly. Ironically, on a special web site, the Social Security Administration notes one of the purposes of the list is to “prevent identity fraud.”

“By methodically running financial, credit, payment and other applications against the Death Master File, the financial community, insurance companies, security firms and state and local governments are better able to identify and prevent identity fraud,” the site says.

Because the IRS often processes returns involving deceased taxpayers, the file has limited use for detecting tax identity fraud. But TIGTA said the IRS is failing to make use of other third party information that could help detect fraud.

“[The Department of Health and Human Services] has a national directory of new hires that indicates whether a person is employed or not employed,” George said. “Access to that directory by the IRS would assist it tremendously to identify people who claim to have income and withholding from that income and did not.”

George noted that the IRS would need authority from Congress to access the directory.

Also a problem, George said: The IRS typically does not receive information from employers about W-2 forms until well after the electronic filing season has begun, giving thieves a window to file false returns and collect refunds.

“Once the money is out the door, it’s either more expensive to capture it through audits or what have you, or the money has left the country and dissipated,” George said.

The IRS notes that this year, that window has been eliminated, though not necessarily because of concerns about identity theft. The IRS delayed the start of electronic filing this year until January 30 — the same day employer tax information is due—because of the need to recalculate tax tables to account for the deficit reduction deal reached on New Year’s Day.

Terry and Stephanie McClung eventually resolved their tax situation, they say through sheer persistence. They still do not know who tried to steal their daughter’s identity, and the IRS declined to comment on their specific case citing privacy rules.

But the McClungs are pushing for changes in the rules to help victims, and urging all taxpayers to protect themselves.

Article source: http://www.cnbc.com/id/100412945

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