Posts Tagged: ‘income tax identity theft’

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.

Scam of the day – July 20, 2013 – Charlton Escarmant sentenced for identity theft

July 20, 2013 Posted by Steven Weisman, Esq.

Recently Charlton Escarmant of Miami, Florida was convicted of fraud and identity theft charges and sentenced to prison for a term of at least seven years.  Escarmant stole names and Social Security numbers of more than 3,200 people from the Tallahassee Community College and used that information to file phony tax returns using this information.  In the phony federal income tax returns he claimed that he was a veterinarian working at the Central Broward Animal Hospital.  He created phony W-2s from the Central  Broward Animal Hospital despite the fact that he had never worked there.  All in all, he filed about 400 fraudulent tax returns seeking more than 3 million dollars in tax refunds.

TIPS

I have written often about the dangers of income tax identity theft.  You can find out more about this by going to the Scamicide archives which can be accessed at the top right hand corner of this page.  You also can find more detailed information in my book “50 Ways to Protect Your Identity in a Digital Age.” If you are a victim of identity theft, it can tremendously delay your ability to receive your own legitimate income tax refund.  Along with protecting the privacy of your name and Social Security number, the best thing you can do to protect yourself from this type of identity theft is to file your income tax return early before an identity thief can beat you to the punch.

Scam of the day – July 17, 2013 – Income tax scam indictment

July 17, 2013 Posted by Steven Weisman, Esq.

Fidelia Negenebor was indicted last week by a federal grand jury in California on nine counts of fraud and identity theft involving a multimillion dollar tax identity theft scam in which he is alleged to have stolen the identities of more than 300 victims and received almost 3.5 million dollars in refund checks from the IRS for fraudulent income tax returns he filed.  According to federal attorneys, Negenebor used stolen names and Social Security numbers to electronically file phony income tax returns with fake w-2s and 1099s in order to receive refunds to which he was not entitled by the IRS.  One refund, in and of itself was for more than a million dollars.  Negenebor was arrested at the Newark , New Jersey airport attempting to flee the country.

TIPS

Income tax identity theft remains a huge problem for everyone and it is not just a problem of the federal government.  If your name and Social Security number have been compromised in an income tax identity theft scam, it will be a long and difficult process to clear your name and get your legitimately owed refund back.  Filing your income tax returns early is a good defense against income tax identity theft because if the identity thief manages to file an income tax return using your Social Security number before you do, there is a high probability that the IRS will pay the identity thief and delay your own refund when you file your proper income tax return.  One reason that the IRS is victimized so often in regard to income tax identity theft is because they do not match W-2s and 1099s filed with income tax returns with those filed by employers, banks, mutual funds and others until months after people have filed their returns.  The simple step of matching the W-2s and 1099s at the time that income tax returns are filed would go a long way toward resolving this problem, but the IRS still has not figured that out.  For much more information about income tax identity theft and what you can do to protect yourself from it, go to the archives of Scamicide at the top right hand corner of this page or check out my book “50 Ways to Protect Your Identity in a Digital Age.”

Scam of the day – April 19, 2013 – Some help with income tax identity theft

April 19, 2013 Posted by Steven Weisman, Esq.

The deadline for the filing of your 2012 federal income tax return is only four days past, but the deadline for income tax identity theft never comes.  Identity theft, by which identity thieves use your Social Security number and name to file a phony income tax return in your name along with a forged 1099 or W-2 that provides them with a huge refund is a major problem costing the federal government billions of dollars and tying up the legitimate refunds for the victims of income tax identity theft for as long as a year.  A  key part of protecting yourself from income tax identity theft is protecting the privacy of your Social Security number which is the key to many forms of identity theft.

TIPS

However, there is another thing you can do that can offer you some measure of protection from income tax identity theft.  File an IRS Form 8821 with the IRS.  This form is like a power of attorney in that it authorizes the IRS to send to a third party, such as your accountant or lawyer, any information regarding your income tax return.  Traditionally, this form has been used when someone is being audited or is having health issues such that an accountant or lawyer is acting on behalf of the taxpayer with the IRS.  However, you can use this form to help combat identity theft.  Name yourself as the third party to receive information about your income tax return so that if there are any issues with the phony income tax return filed by the identity thief, you will be contacted.  This can help serve as an early alert system if an identity thief has filed an income tax return on your behalf and the tax return has any issues that arouses IRS interest.

Scam of the day – April 9, 2013 – Hospital identity theft

April 8, 2013 Posted by Steven Weisman, Esq.

A few days ago officials at a Jacksonville, Florida hospital, the Shands Brentwood Primary Care Center warned more than a thousand patients that they are in danger of identity theft due to the stealing of their personal information by an employee at the hospital.  An investigation discovered that health records including the names, addresses, Social security numbers, dates of birth service locations and medical record numbers of 1,025 patients had been stolen by a former employee.  This information puts these patients in serious danger of identity theft and, in some cases, may already have been used to file false income tax returns.  In addition, the victims are also in danger of the serious risks that come with medical identity theft where someone’s medical insurance information is used to provide medical services to someone else.   This can result in a contaminating of the medical records of the identity theft victim, such that false medical information about the patient may appear on his or her records with the risk of receiving improper care, such as a blood transfusion of the wrong blood type.

TIPS

This case once again highlights that no matter how well you protect your personal information, your security is only as strong as the security in the weakest place that holds your information.  Whenever you provide personal information to anyone, company or agency you should inquire as to what security precautions they take to preserve the privacy and security of your information.  It also illustrates the importance of being proactive in preventing harm from identity theft by taking actions such as having a credit freeze on your credit report.  Information about credit freezes, income tax identity theft and medical identity theft can be found elsewhere in this blog and also in more detail in my book “50 Ways to Protect Your Identity in a Digital Age” which can be purchased from Amazon by merely clicking on the link on this blog.