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.


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 – February 24, 2013 – More income tax identity theft scams

Every season is scam season and income tax season is a huge time for income tax identity thefts by which identity thieves access your name and Social Security number and the file a phony income tax return in your name and claim a phony income tax refund based on false information they include in the return.  The Treasury Department Inspector General issued a report last summer that predicted the IRS will lose as much as 21 billion dollars to income tax identity theft over the next five years.  However, it is not just the IRS that loses, but it is also the person whose name and Social Security number has been stolen who is harmed.  If you file your legitimate return after the identity thief has filed a return using your name and Social Security number, it can take up to a year for you to get your legitimately owed refund from the IRS.


The key to protecting yourself from this kind of identity theft is to protect your Social Security number as much as possible.  Don’t carry your Social Security card with you.  Shred any documents that may contain personal information, such as your Social Security number so dumpster diving identity thieves cannot go through your trash and turn it into their gold.  Limit the places that have your Social Security number.  Don’t give it to companies that ask for it to use it as an identifier of you unless they legally need it, such as when you apply for a loan from a bank.  My eye doctor wanted my Social Security number and I refused to give it.  Remember, the security of your personal information is only as secure as the security of the weakest place that holds your information.  Keep your computer and other electronic devices protected with the latest security software to prevent hacking into your devices and stealing your information.  Finally, file your income tax return as early as possible to prevent an identity thief from filing before you do.

Scam of the day – February 23, 2013 – Hospital worker convicted of identity theft

Recently, Angeline Austin was convicted of identity theft in Alabama and sentenced to 65 months in prison.  Ms. Austin had worked in the Troy Regional Medical Center records office where she stole personal information including names, Social Security numbers and dates of birth on more than 800 patients and then sold that information to other identity thieves for as much as $8,000 per person.  The secondary black market for information that can be used for identity theft is large.  This information was used to file phony income tax returns in the names of the victims through which the identity thieves collected 1.6 million dollars in phony refunds while the victims were caught in bureaucratic hell trying to get their legitimate tax refunds.  One of the victims lost his six figure income job working for a defense contractor when the theft of his identity resulted in a loss of his security clearance.


Things are not as bad as you think.  They are worse.  The lesson here is a familiar one.  You are only as safe from identity theft as the weakest place that has your personal information.  Whenever you do business with anyone, you should inquire as to what they do to insure the privacy of your personal information and never give your personal information to any company or agency that does not need it.  I had an eye examination earlier this year where the optometrist requested by Social Security number.  He had no legitimate use for it and I did not provide it.  You should do the same.