Scam of the day – October 14, 2013 – Income tax identity theft arrest

If you go through the archives of Scamicide, most recently in the Scam of the day for August 3, 2013, you will find much discussion of income tax identity theft and with good reason.  Income tax identity theft which occurs when an identity thief obtains the name and Social Security number of a person and then files a phony income tax return using the victim’s personal information but with counterfeit W-2s and 1099s that result in a bogus tax refund is a huge problem for the IRS.  It is also a big problem for the person whose identity has been stolen because when the identity thief manages to file the income tax return using the victim’s Social Security number before the real taxpayer files, the victim’s refunds is delayed tremendously while the IRS, with its usual “efficiency” investigates the matter.  It does not take a great deal of intelligence and sophistication to pull off this scam.  Income tax software such as Turbo Tax is usually used and it is a simple matter to have the refund sent by way of a debit card to an address provided by the identity thief.  The recent arrest in Florida of one income tax identity thief highlights that proposition that not identity thieves are criminal masterminds.  This particular scammer left his wallet containing 13 tax refund debit cards issued in 13 different names at the United Airlines ticket counter at the Tallahassee Regional Airport.  By the way none of the names on the cards matched the names of any of the passengers who flew on the particular flight taken by the identity thief.  However, surveillance video was able to identify the identity thief and all of this evidence was provided to the police.  But the story doesn’t end there.  the identity thief actually called the Tallahassee police to report his missing wallet whereupon the police, knowing who he was told him to come to the United Airlines Ticket counter in Fort Lauderdale, the city to which he had flown in order to pick up his wallet.  When he went to the ticket counter he was met by IRS agents who promptly arrested him.

TIPS

Becoming a victim of income tax identity theft can disrupt your life tremendously.  The two keys to preventing yourself from becoming a victim is to closely guard your Social Security number and to file early.  Income tax identity theft only works if the identity thief is able to get their tax return using your Social Security number filed before you file your legitimate tax return.  It would also help the situation if the IRS matched 1099s and W-2s with those filed by employers and financial institutions before issuing refunds based on easily counterfeited documents, but that is too easy a solution for the IRS to figure out.