Scammers Want Your Stimulus Check And Tax Refund

Phoung Cat Le from the Seattle Post-Intelligencer reports that a colleague of hers is the victim of income tax ID theft. A scammer filed her income taxes before she did, hoping to get a hold of her refund and stimulus check.

From the P-I:

Earlier this week, one of my colleagues sat down at her computer to file her income tax return electronically using TurboTax. Twice, her return was rejected. The message she got back was startling: the IRS already had a tax return filed under her Social Security number.

How could this be? She hadn’t filed yet.

Panicked, she called the Social Security Administration to make sure her name matched her Social Security number. It did. Then she called the IRS. A representative pulled up the tax return filed under her name and Social Security number, and asked to verify the address. It wasn’t hers.

A thief had filed a fraudulent tax return under her name, and would likely get her $1,000 refund, not to mention her $600 economic stimulus payment. Thus began her tedious task of clearing her name: filing a police report, filing a complaint with the Federal Trade Commission, putting a fraud alert on her credit report and mailing in her tax return with copies of her driver’s license, police report and other documents to prove her identity.

The IRS doesn’t have any programs in place to prosecute or prevent this type of ID theft, but that may be changing because a new audit shows that tax-related ID theft is growing.

From the AP:

Douglas Shulman, who took over as IRS commissioner three weeks ago, said that by this fall the tax agency will have specially trained people on call to help victims of identity theft. He pledged that people with a problem will get through to a person who can help them.

“We understand the personal devastation that an individual feels when their identity has been stolen,” he said.

Has this happened to you?

When a thief steals your tax refund [Seattle P-I]
(Photo:BenPopken)

Comments

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  1. Smooooth says:

    But are they taking it seriously?

  2. chrispiss says:

    Tax Cat sez: You’re screwed

  3. rjhiggins says:

    @Smooooth: Are people who post these “taking it seriously” comments being ironic? Sarcastic? Or do they really think it’s still funny?

  4. Dobernala says:

    Send the Tax Dog out to harass the guy who stole it.

  5. Beerad says:

    Wow. That is seriously creepy. Bonus if the scammers figure out you’re entitled to more money back, though.

  6. FightOnTrojans says:

    @rjhiggins: It’s like the bozos that post “FIRST” on other forums or blogs. Let them have their little spot in the sunshine.

  7. Underpants Gnome says:

    Lesson to be learned: File early.

  8. HaloZero says:

    This is one of those ID thefts where you go…. WTF? I didn’t even know about this type of scams before this.

  9. ivanthemute says:

    Well, since the IRS has the fradulent address on file, why shouldn’t local law enforcement (or if it’s out of state, the FBI) go after this? Doesn’t this type of identity theft constitute mail or wire fraud?

  10. katylostherart says:

    wow. so what’d they do steal her paystub? how did they submit without a w2?

  11. Pasketti says:

    @Underpants Gnome: ICON LOVE

  12. EyeHeartPie says:

    @rjhiggins: There is a whole thing on Consumerist about companies claiming that they are “Taking it seriously”, ‘it’ referring to various problems being reported to them. Read up on it.

  13. Traveshamockery says:

    I suggest that Consumerist come up with a procedure to follow, should this happen to one of us.

    It would be a nice resource, because this type of activity is sure to increase.

  14. SadSam says:

    @ivanthemute:

    The IRS only goes after this type of ID theft if there is another major crime (according to another article I read on this issue) having a large tax impact.

    “But the agency rarely recommends identity theft cases for prosecution, the report found. Of 2,720 prosecution recommendations made by the IRS Criminal Investigation Division in fiscal year 2006, 55 involved identity theft.”

  15. Traveshamockery says:

    @ivanthemute: Happened to someone I know – they used a fraudulent address too, and had the refund direct-deposited to a bank account that was opened via the internet. The money was then transferred out, and overseas.

  16. Crumbles says:

    FairTax people. IRS = gone.

  17. Traveshamockery says:

    @Crumbles: “FairTax people. IRS = gone.”
    Who’s going to make sure businesses are correctly reporting the receipts of the “FairTax” and paying them out?

    But I do agree that it would greatly shrink the bloated IRS (not to mention it would make drug/prostitution/black market money taxable).

  18. Hanke says:

    This has already happened to my mother-in-law; The IRS will not issue her a refund check until they can determine that she was a victim; the state of New York already straightened everything out.

  19. oakie says:

    @rjhiggins: it seems to be the new “will it blend?”… and ridiculously unfunny.

    seems to stem from the people who post vids of themselves on youtube thinking they’re funny.

  20. attheotherbeach says:

    katylostherart: if you e-file, you don’t have to send in the w-2.

  21. BuddyGuyMontag says:

    I can understand tax scams happening with shady accountants, but how exactly can somebody steal your W-2, 1099’s, etc. to accurately file your taxes to get your refund? I can understand filing early to get the stimulus check, but doesn’t it have to be a lot more complex to get the refund?

    I’m guessing that someone’s paystub isn’t very secure. (SSN listed)

  22. BuddyGuyMontag says:

    @katylostherart: If you e-file, you don’t have to submit W-2’s, just “accurate information”. If there’s a problem, hold on to your W-2’s, but the whole concept of e-filing is to reduce paper and speed up the process.

    I’m still wondering what kind of information they filled to get a refund. Unless all they had was her SSN and just filled out fake info.

    There’s information missing from this story. If you e-file, there’s some safeties in place to make sure you are you. If the thief paper-filed, then was there fake W-2’s supplied? Because then it’s not “her” refund. They are trying to bilk the IRS for money using fake info.

  23. BigElectricCat says:

    @Crumbles:

    Nothing fair about it. Among other problems, it increases the debt load of retirees who rely on either Social Security or Roth IRAs for income.

    I don’t think there’s much fair about that.

  24. howie_in_az says:

    @BuddyGuyMontag: More importantly, can you simply use the tax return prepared by the scammer as your own, correcting the address and bank account info? Seems like a handy, TurboTax-free way of doing taxes, minus the small inconvenience of identity theft at the beginning.

  25. BobCoyote says:

    If anyone tries to scam me, the joke’s on them. I’ve got my allowances set so I end up owing the IRS, instead of the other way around.

  26. BuddyGuyMontag says:

    @howie_in_az: This is the IRS we’re talking about. I wouldn’t try it!!

  27. Nicholas_schaulsohn says:

    If you file online you need last years exact return amount or a digital pin that you created the last time you filed taxes online.

  28. BuddyGuyMontag says:

    @Nicholas_schaulsohn: This. Which makes me think the scammer filed with paper, but then you’d need paper W-2’s, which makes think this scammer is being really complex or really clueless.

    I can’t RTFA, but does Phoung Cat Le indicate how her colleague filed? Something is WRONG here.

  29. mobilehavoc says:

    Something’s fishy, I think the real story is she asked a friend or a shady person to do her taxes and this is what happened. As mentioned in order to e-File you either need your PIN or the EXACT (to the dollar) amount of last years return. If a scammer can figure either of those out themselves, they should get to keep your refund.

  30. katylostherart says:

    @Nicholas_schaulsohn: which is why this makes no sense to me. how’d he get the corresponding paperwork? and i hope she checked on her state taxes.

  31. rixatrix says:

    $1000 tax return? Maybe the real issue is that she’s having too much withheld every paycheck. Would you rather lose $1,000+ or a couple hundred to scammers? File early, especially if they owe you money. No one’s jumping to pay off someone else’s tax bill.

  32. failurate says:

    If they are willing to steal your ID, don’t you think they are willing to fudge a few numbers to get a bigger stolen refund, or create a refund where none existed before?@rixatrix

  33. failurate says:

    The government knows far less about our individual finances than many of you are giving them credit for.

  34. Silversmok3 says:

    Wow.

    This is a rather easy scam. And dangerous, because the crook probably faked several details about her income,kids,and liabilities so as to get the maximum refund and stimulus payment.

    She could be looking at a serious tax liabilty and penalties for tax fraud before the dust settles. She’ll get charged with tax fraud probably before the paperwork about the false return makes its way via the IRS system.

    And the thief gets paid. Truly sick.

  35. Omir The Storyteller says:

    @katylostherart

    If Le’s friend is (like Le) a resident of the state of Washington, she doesn’t have any state taxes to worry about. Washington is one of the few states with no state income tax — a fact which perplexes TurboTax every year when I tell it “No, I’m not interested in buying State TurboTex” because there isn’t one for my state.

  36. theczardictates says:

    @rixatrix (and others): You’re all assuming that she has a W2 or 1099s. If she’s self-employed she may well not. If I was going to run this scam, I’d target a small business owner. It would be pretty easy to “establish” a loss just by making up income and expenses.

  37. What I want to know is how she’d be getting 600 back! I made over 12000 last year as did many many other people, and I’m only getting 343 back!

    I guess I should count myself lucky that I filed before someone else filed for me.

  38. lesspopmorefizz says:

    I think this happened to me, as Turbo Tax gave me the EXACT SAME RESPONSE when I tried to file yesterday. Please keep us updated, and I will let you lovely people know if my identity was, indeed, stolen.

  39. trujunglist says:

    @lesspopmorefizz:

    Umm, you may want to start making some phone calls…