Identity theft blamed for skyrocketing bogus Ohio tax filings

Ohio tax officials intercepted state income-tax filings fraudulently seeking $180 million in
refunds this year.

That is 18 times more than the average $10 million in fraudulent refunds uncovered in previous
years, according to the Ohio Department of Taxation.

Taxation spokesman Gary Gudmundson said officials think they are slamming the door on the “vast
majority” of fraudulent returns.

The huge increase in fraud is not unique to Ohio, Gudmundson said, and can be blamed on an
increase in identity theft.

A recent report by the U.S. Government Accountability Office said the Internal Revenue Service
paid $5.2 billion in fraudulent refunds in 2013, while catching another $24.2 billion. Ohio does
not have figures on how much money in fraudulent-refund returns were paid.

“We don’t believe we’ve caught every attempt at theft. We believe we’ve caught the vast
majority,” Gudmundson said.

Last week, a southwestern Ohio man, Christopher Kyle Smith, pleaded guilty to stealing the
identities of dead children and filing fraudulent income-tax returns seeking $40,000 in refunds. He
faces up to two years in prison and a $250,000 fine.

The most common fraud detected is when a taxpayer or professional tax filer submits a return for
a refund and is notified that a return has already been filed under that tax-identification number.
If caught in time, the state halts the refund.

Gudmundson said other measures are used to detect fraud, but he declined to discuss them for
security reasons.

The deadline for filing state and federal income returns is April 15 each year, but today is the
deadline for filers who obtained a six-month extension.

The Department of Taxation sent an email last week to tax preparers urging them to be watchful
for tax fraud. If they receive an error message from the state notifying them that a return had
already been filed, they should send an ID Theft Affidavit to the state.

More information on identity theft is available online at the Department of Taxation:
www.tax.ohio.gov/IdentityTheft.

ajohnson@dispatch.com

@ohioaj

Article source: http://www.dispatch.com/content/stories/local/2014/10/15/state-stops-180-million-in-bogus-tax-returns.html

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