Last year we reported that tax and wage identity theft in 2011 increased over 70% compared to 2010. (As soon as the government releases the 2012 identity theft statistics, we will issue a special report on Examiner.com.) Be aware of identity theft that involves your IRS or state tax returns. Clues that you are a victim of this type of identity theft include not receiving your refund and having your tax return rejected for the reason that it was already filed.
Tax and wage identity theft primarily reflects fraudulent tax returns filed in the name of the identity theft victim, where the identity thief obtains the tax refund belonging to the victim. The identity thief must have knowledge of the victim’s name, Social Security number and some idea of their reported wages. Wage information can be obtained from employers, W-2 forms and tax returns. Taxpayer wage information can be obtained through theft of the information in the workplace, mail theft, and by other means including phishing and other types of social engineering.
Unscrupulous tax preparers may also be involved in this type of fraud, which is the subject of a yesterday’s press release by the U.S. Department of Justice. Tax preparers have knowledge of the victim’s (their client’s) wages and when they file their tax return. They may also have knowledge of deceased client’s information, whom they can victimize. Below is the informative and educational January 30, 2013 Department of Justice press release concerning a dishonest tax preparer:
Georgia Tax Return Preparer Sentenced to Jail for Identity Theft
Willie C. Grant, a tax return preparer from Macon, Ga., was sentenced to 60 months in prison by for filing false claims for tax refunds, theft of government money and aggravated identity theft, the Justice Department and the Internal Revenue Service (IRS) announced today. U.S. District Court Chief Judge C. Ashley Royal also ordered Grant to pay over $200,000 in restitution to the IRS.
According to court documents, from 2003 through 2008, Grant owned and operated a tax return preparation business, Grant Income Tax Bookkeeping and Check Cash (GIT) out of his home in Macon. During this time period, Grant filed false federal income tax returns in the names of deceased individuals and used many of his former clients’ names and Social Security numbers to file wholly fraudulent returns without their knowledge or consent. Grant directed the IRS to either electronically deposit refunds into his personal or business bank accounts or issue paper refund Treasury checks which he cashed or deposited into bank accounts he controlled. Grant spent the proceeds of his false refund scheme on personal items including expensive cars and personal living expenses. Grant admitted that that he abused his position of private trust as a professional paid tax preparer in committing these crimes.
“Honest taxpayers are doubly harmed when they entrust return preparers with their information, who turn out to be thieves who steal that information to enrich themselves by making fraudulent refund claims,” said Assistant Attorney General Kathryn Keneally. “The Justice Department will investigate and prosecute stolen identity refund fraud in all of its various forms.”
“When Mr. Grant stole these identities and defrauded the IRS, he victimized not only the people whose names and social security numbers he used, but every tax paying citizen in the United States. My office, with the continued cooperation of our law enforcement partners, will make sure that people like Mr. Grant are held to account for their fraud,” said Michael Moore, U.S. Attorney for the Middle District of Georgia.
“Mr. Grant used a foundation of fraud and deceit in order to cheat the government and victimize innocent taxpayers and is now being held accountable for his egregious behavior,” said Richard Weber, Chief IRS Criminal Investigation. “As a paid tax preparer, Grant held a position of trust in the eyes of his clients. He violated that trust and caused immeasurable harm to innocent victims. IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of those individuals whose identities were stolen, as well as the U.S. tax system.”
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