Posts Tagged: ‘income tax identity theft’

Scam of the day – October 28, 2014 – Healthcare worker pleads guilty to identity theft

October 28, 2014 Posted by Steven Weisman, Esq.

Florida medical assistant La Toya Yvette Tillman has been convicted of aggravated identity theft and sentenced to three years in prison.  Through her work at Gastroenterology Consultants she was able to access the database for the entire Memorial Healthcare System, one of the largest health care systems in the country.  Tillman stole personal information including patients’ names, dates of birth and Social Security numbers which she sold by the thousands to identity thieves who, in turn, used the information to file fraudulent income tax returns and commit income tax identity theft.  The lack of security in the health care industry nationwide is far worse than that of retailers such as Target, Home Depot and others that have been the victims of major data breaches.  This case in particular points to the problem of insider identity theft where rogue employees, having access to personal information of patients are able to steal that information.   Regardless of how strong a company’s security is to withstand an attack from outside of the company, it is necessary to combine that security with strong security from threats within the company.

TIPS

This should be a wake up call to many companies and not just those in the health care industry to better protect the privacy of their data banks from threats within the companies as well as outside of the companies.  Too much information is readily accessible in many companies to too many people in the companies with no need to have access to that information.  However, this case also is a good example of companies having access to Social Security numbers, the key to identity theft when they don’t need this information.  People think that medical care providers need your Social Security numbers, when in fact the main reason medical care providers and others demand the number is to make collection of overdue bills easier for them.  Try to limit as much as possible the companies to which you provide your Social Security number to those that truly have a need for it.  The information stolen by La Toya Yvette Tillman would not have been sufficient for her accomplices to file fraudulent tax returns if the Social Security numbers were not included in the stolen data.

 

Scam of the day – September 25, 2014 – GAO report on income tax identity theft and the IRS

September 25, 2014 Posted by Steven Weisman, Esq.

Earlier this week, the General Accountability Office issued a new report dealing with income tax identity theft and what the IRS should be doing to reduce this problem which, last year alone cost taxpayers more than 5 billion dollars in fraudulent refunds paid to identity thieves who stole the Social Security numbers of innocent taxpayers and filed phony income tax returns along with counterfeited W-2s.  A report last year done by the Treasury Department predicted that the IRS will pay out more than 21 billion dollars in fraudulent tax refund checks over the next five years.  As for the innocent taxpayers whose Social Security numbers were used in these fraudulent returns, it sometimes takes as long as a year for the IRS to correct the problem and pay to the real taxpayer his or her legitimate refund.   In its report this week the GAO singled out a significant failing in the way that the IRS processes income tax returns, namely under the present system, W-2s are sent by employers not to the IRS, but to the Social Security Administration who often does not get around to forwarding these to the IRS for matching with already filed income tax returns until July, well after most tax refunds have been paid.  A simple solution would be to require e-filing or simultaneous filing with the IRS of the W-2s before refunds are sent out.  Regular readers of Scamicide.com may remember that I exposed this problem and made the same recommendation more than a year ago in my Scam of the Day of August 3, 2013.

TIPS

In order to avoid income tax identity theft personally, you should file as soon as possible to beat a potential identity thief to the punch.   You should also try to protect the privacy of your Social Security number as much as possible to minimize the opportunity for an identity thief to file an income tax return using your name and number.

Scam of the day – July 1, 2014 – Income tax identity theft update

June 30, 2014 Posted by Steven Weisman, Esq.

Income tax identity theft is a huge problem and it is only getting worse.  Income tax identity theft occurs when an identity thief files a phony income tax return using the Social Security number of his or her victim.  The phony income tax return includes a counterfeit w-2 which results in a large, undeserved refund check being sent to the identity thief.  Meanwhile, the real taxpayer is delayed in obtaining their legitimate refund while the IRS slowly investigates the crime.    According to the Treasury Inspector General for Tax Administration it takes almost a year for the IRS to resolve individual claims of legitimate taxpayers.  According to the GAO in 2008 there were 47,730 recorded incidents of income tax identity theft, but that number grew to 641,690 incidents in 2012 and shows no indication of slowing down.  Florida Senator Marco Rubio has repeatedly contacted the IRS for information as to what the IRS is doing about this problem.  Income tax identity theft, particularly affecting senior citizens occurs more in Florida than in any other state.  The IRS has been slow to respond to Senator Rubio in his inquiries over the past year who is continuing to press the IRS for answers.

TIPS

Along with protecting the privacy of your Social Security number, the best thing you can do to protect yourself from income tax identity theft is to file your income tax return early.  Income tax identity thieves file before their victims do so they receive their refund before their victims have filed their legitimate returns.

Scam of the day – May 11, 2014 – What’s up doc? Your identity

May 11, 2014 Posted by Steven Weisman, Esq.

In recent weeks a rash of identity thefts have occurred targeting physicians in New Hampshire, Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina and the District of Columbia.  Many of these physicians who have become victims of income tax identity theft as their Social Security numbers were used by identity thieves filing phony income tax returns with their Social Security numbers and collecting refunds based on counterfeit W-2s.  Income tax identity theft is a huge problem and a sore spot with me as I don’t think the IRS is taking the one simple, low-cost step that could dramatically reduce this crime.  The IRS. as I have told you many times previously, does not compare W-2s in filed tax returns with the real W-2s filed by employers until August, long after they have sent out refunds.  Merely comparing the W-2s before sending out a refund would go a long way toward stemming this tide of income tax identity theft in a cost effective manner.

The identity theft of the physicians in the affected states has been traced to various state and national professional organizations, however the precise source of the hacking has still not been determined.  Once again, it is clear that regardless of how protective you are of your identity, you are only as safe as the places that hold your personal information with the weakest security.

TIPS

Whenever possible do not provide your Social Security number to companies, agencies or other entities with which you do business unless you absolutely must do so.  Also, monitor your credit report and your financial accounts regularly to become aware of any security breaches as soon as possible.  Also, because you cannot control your own security, it is prudent to put a credit freeze on your credit report so that even if someone obtains your Social Security number, they cannot get access to your credit report for purposes of making large purposes.  Go to the section on Credit Freezes on the right hand side of this page for information about how to put a credit freeze on your credit reports.

Scam of the day – March 16, 2014 – Identity theft from deceased baby

March 16, 2014 Posted by Steven Weisman, Esq.

It was devastating for the parents of Logan Bryant when their infant son died of Sudden Infant Death Syndrome (SIDS) at daycare last summer, but now they are facing another blow.  Shortly after his death Logan became a victim of identity theft.  Using the Death Master File it is thought identity thieves were able to access Logan’s  full name, birth date, and Social Security number.  They were then able to use that information to file a phony income tax return in Logan’s name making him a victim of income tax identity theft.  As I have described in a number of Scams of the day, the Death Master File is a federal database that contains the names and Social Security numbers of more than 83 million dead Americans.  The list was initially established to help federal agencies, insurance companies, tax collectors and others be able to prevent fraud by being able to confirm when someone has died so that further lifetime benefits would not be issued under that name.  However, as an unfortunate byproduct of the Death Master File, identity thieves regularly check it after getting names from obituaries (the file is available to absolutely anyone) and get the Social Security numbers for recently deceased people.  They then access credit in the names of the deceased as well as file phony income tax returns on behalf of the deceased and other identity theft tactics.  When Congress finally was able to reach a budget agreement and stop the federal shutdown, a part of the budget law included removing public access to the Death Master File.  However, as of today the list is still available to anyone, including identity thieves because the National Technical Information Service, the federal agency that manages the Death Master List has not closed it because it still needs to make provisions for access to the list by organizations that need the information for legitimate purposes.  It is expected that this process could take months before it is completed.  Meanwhile, a recent study by the federal government’s General Accountability Office indicates some federal agencies that need this information to prevent fraud are not getting the acce1ss that they need.

TIPS

Identity theft from dead people is a significant problem, but there are steps that you can take to limit this as a problem in your own family.  First, you should consider limiting the personal information that you put into a family member’s obituary.  Often this information is exploited by identity thieves to assist them in making your deceased family member a victim of identity theft.  Additionally, you should contact the three major credit reporting bureaus, Equifax, Experian and TransUnion to inform them of the death of your family member and to instruct them to close the credit report of your family member in order to avoid someone with access to your family member’s Social Security number from getting access to his or her credit report to use to make large purchases.  Although infants do not have credit reports, their deaths do appear in the Death Master File.  Hopefully  the National Technical Information Service will act soon to prevent this type of identity theft from continuing to happen and parents, such as those of Logan Bryant can be spared this extra grief.

Scam of the day – February 6, 2014 – Identity theft convictions

February 6, 2014 Posted by Steven Weisman, Esq.

Recently Domingo Pablo Guttierrez, Moises Lara-Ceballos, Juan Quero-Mendez and Adonis Ramirez-Segura were convicted on various charges related to an identity theft conspiracy by which the defendants stole the Social Security numbers and other information of Puerto Ricans and sold the information for between $700 and $2,500 per set to Americans in Ohio, Indiana, Georgia and Alabama.  The information was used for a number of different illegal purposes.  Social Security number of Puerto Rican citizens living in Puerto Rico are particularly valuable to income tax identity thieves because Puerto Rican citizens who derive all of their earned income from Puerto Rico are not required to file federal income tax returns.  Thus they are more likely to go undetected when filing a false income tax return using the Social Security number of a Puerto Rican citizen.

TIPS

A key to identity theft is your Social Security number.  It is important to make every effort to keep it secure and limit the places that have your Social Security number as much as possible because your security is only as strong as the weakest place that holds this information.  It is also important to consider filing your income tax return as early as possible to prevent an identity thief from using your Social Security number and filing before you do.

Scam of the day – January 9, 2014 – Latest developments in income tax identity theft

January 9, 2014 Posted by Steven Weisman, Esq.

I have written in numerous Scams of the day about income tax identity theft and with good reason.  Income tax identity theft is a huge problem for the IRS and for taxpayers whose identities have been stolen.  I am sure I will be writing more about income tax identity theft as the tax filing deadline of April 15th approaches.  For those of you unfamiliar with how income tax identity theft works, it is a simple matter.  An identity thief gets access to your Social Security number and files a phony income tax return in your name complete with a counterfeit W2 and/or counterfeit 1099 indicating that a large refund is due.  If the IRS does not discover on its own that the income tax return is phony, which is often the case, the identity thief has effectively managed to steal money from the federal government.  This is a huge problem costing the government and ultimately, we the taxpayers billions of dollars.

But, how are you as an individual taxpayer harmed?  Identity thieves file income tax returns early in order to get a tax return in your name into the IRS before you file your legitimate return.  Once you file your legitimate return it is flagged because now the IRS has two tax returns filed for the same person and this delays by as much as six months or more your receipt of your legitimately owed tax refund while the IRS investigates the crime.

TIPS

The first way you can protect yourself from income tax identity theft is to protect the privacy of your Social Security number as much as possible because your Social Security number is an essential element for the filing of an income tax return.  The second thing you can do to protect yourself from becoming a victim of income tax identity theft is to file your income tax return as early as possible so that the identity thief does not have the opportunity to file before you.  If you are due a refund, it also makes good sense to get your tax return filed as soon as you can.

The IRS is spending millions of dollars to combat identity theft and they have a special telephone number for you to call if you have become a victim of identity theft.  The number for the IRS Identity Protection Specialized Unit is 800-908-4490.  The plain hard fact is that there is an easy way at little cost for the IRS to substantially reduce income tax identity theft, but they continue to not do so.  W-2 forms are not required to be filed by employers until February or March depending on the manner of filing used by the employer.  In fact, the filing is not even with the IRS, but is done with the Social Security Administration.  The Social Security Administration does not even send these documents over to the IRS until later summer and the IRS does not match the W-2s filed with the W-2s filed by employers until August, well after the IRS has already paid income tax returns based, in many cases on counterfeit W-2s.  How easy would it be to merely require employers to file W-2s with the IRS as well as the Social Security Administration and merely match the W-2s filed with income tax returns with those filed by employers before sending refunds?  This simple step could dramatically reduce income tax identity theft at little cost, yet the IRS continues to fail to implement this easy solution.

Scam of the day – October 18, 2013 – Income tax identity theft conviction

October 18, 2013 Posted by Steven Weisman, Esq.

Since income tax first became a major problem for the IRS in 2008, the IRS has lost billions of dollars every year and the problem is getting worse.  The crime is somewhat simple and exploits a number of flaws in the IRS processing of income tax returns, most notably that the IRS does not match 1099s and W-2s for many tax returns until months after the return is filed and the refund has been made.  Identity thieves exploit this flaw by filing early and electronically with counterfeit 1099s and W-2s to steal billions from the federal government every year.  The key to income tax identity theft is the gathering of the names and Social Security numbers of victims and using them to file the bogus income tax returns.  Recently, as part of an increased effort to catch income tax identity thieves, Miami police officer Malinsky Bazile was convicted of stealing personal information of a thousand people from the Miami police department’s data base and using that information to file phony income tax returns.

TIPS

Until the IRS gets its act together, the best place to find a helping hand is at the end of your own arm.  The two main things you can do to reduce your chances of becoming a victim of identity theft are to safeguard the privacy and security of your Social Security number as much as possible and file your income tax return early.  Income tax identity thieves are only able to get a refund using your name and Social Security number if they file before you do.  The early bird gets the tax refund.  It is also important to file early because if you do become a victim of identity theft, the IRS is extremely slow in investigating the crime and it will be many months before you get your legitimate refund.

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

October 13, 2013 Posted by Steven Weisman, Esq.

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.

Scam of the day – August 3, 2013 – Income tax identity theft update

August 3, 2013 Posted by Steven Weisman, Esq.

Income tax identity theft by which identity thieves steal the names and Social Security numbers of people and then file phony income tax returns complete with forged W-2s and 1099s in order to claim huge phony refunds is a big problem that is expected to get worse.  Recently, however, a number of states including Louisiana, South Carolina and Connecticut as well as the IRS have started using advanced computer programs to help identify fraudulent tax returns before they send a refund.  These software programs developed by companies such as IBM and LexisNexis use publicly available information to cross reference the information in the phony returns to see if they match available data, such as where a person filing a tax return is living in a new state from where the real person had filed a return previously.  A simpler method, which the IRS still is not using is to cross reference the counterfeit, phony W-2s and 1099s with the real W-2s and 1099s filed by employers and company’s issuing 1099s at the time of the receipt of the income tax return rather than months later as is their present protocol.

TIPS

Along with keeping your Social Security number as private and safe as you can to prevent it from being stolen, the best thing you can do to avoid income tax identity theft is to file your income tax return as early as possible so that an identity thief does not have the opportunity to file a phony one before you do.