Every once in a while you hear a story that makes your blood boil. Sometimes it seems like the media blows things out of proportion. Other times huge stories slip under the radar. This is one of those stories that you just cannot believe has not made the front page of Time and Newsweek.
Government Bilked Out of $1 Billion A Year
Thieves in Tampa, Florida are using fake IDs have been stealing astonishing amounts of money from the federal government in a scam that was disturbingly easy to run.
If estimates are correct, the local losses each year are larger than the entire city budget. Tampa Police Chief Jane Castor said the fraud probably exceeds $1 billion a year. Yes, you read that correctly - $1 Billion per year!!!
It is outrageous that at a time the federal government is debating major budget cuts, Washington is squandering billions in such scams across the nation.
Where the heck is our good buddy IRS in all of this?
I don’t know about you, but I think Congress should hold immediate hearings to get to the bottom of the problem. It's frightening to contemplate the size of the losses nationwide if Tampa is representative of what's happening elsewhere.
Postal inspectors here report intercepting 10,000 fraudulent refunds worth an average of $5,000 per return. That much money flowing in explains how some of the perpetrators could buy $100,000 cars and pay cash.
Paying taxes is hard enough without learning that the tax check may be subsidizing a life of luxury for a crook. It's doubly irking to know that a thief may have already claimed a return in your name, so that when you do file your return, you're the one who sets off IRS alarms.
The problem is connected to tax laws that give money back to low-income families meeting certain qualifications. Back in 1999, the General Accounting Office estimated that the IRS had overpaid family tax credits by nearly $10 billion.
Things appear to have gotten worse.
Stolen Social Security numbers are often used on the phony returns, and the news is full of stories of stolen Social Security numbers. School districts and universities are frequent targets. The University of Wisconsin just reported that a malware program could have stolen 75,000 of its Social Security numbers.
And if you can't steal a number yourself, Social Security numbers are also openly sold on the Internet. Fraudulent forms sometimes use the identities of dead taxpayers, and the crooks sometimes use the numbers of young children who haven't yet reported Social Security income.
In a related development, the Treasury Inspector General for Tax Administration reports that people working illegally in the United States collected $4.2 billion from the IRS last year by claiming child tax credits. The IRS doesn't seem to have a plan to stop that abuse.
In Tampa so far, 49 people have been arrested on charges related to tax irregularities. Get this, so far police are doing all the work, but they can't charge anyone with actual tax fraud because they aren't even authorized to look at a suspect's income tax form.
IRS enforcement should be bolstered. If each city in the country is costing the federal government $1 billion a year in blatant fraud, more IRS agents would quickly earn their keep.
Funny or So Sad You Want to Cry
Another aspect of this case capable of making an honest taxpayer spit breakfast coffee all over the newspaper is that almost all of those caught said they didn't think they were doing anything wrong. It was so easy and the money came so quickly, they seemed to have really thought that no one cared.
What is being done about this problem? You can rest assured I will be contacting all my congressmen both state and nationally and I encourage you to do the same.