This is the eighth is a series of blogs here at stoptheftclass.com looking at the rampant problem of tax fraud. Why so many blogs on one issue, you ask? The answer is easy – because the problem is horrific with millions of dollars being doled out by the US government each year in fraudulent refunds.
Do you think it might be a good idea to check returns up front with financial information? As a taxpayer, would you like to see Congress increase IRS ? As reported in www.bostonglobe.com.
Many of the fraudulent tax returns are filed by using the Social Security numbers of people who are not required to file returns and thus don’t realize their identity was used to obtain illicit refunds. For example, potentially fraudulent returns were filed in 2011 using the Social Security numbers of 1,451 children under 14 years old; 19,102 dead people; 37,249 prisoners; and 753,000 people whose income level did not require a tax return.
The ability of criminals to file returns using the names of dead people has been a known problem for years. It has long been easy to get access to what is known as the “Death Master File,” which includes Social Security numbers of recently deceased people.
A criminal can use the Social Security number of a dead child, for example, to claim that person as a dependent in the year of death. It was not until December that Congress passed legislation to restrict the public’s ability to get such information, and it still remains available while regulations are written to implement the new rule.
Stoptheftclass.com will have one more blog on tax fraud. I welcome your thoughts on the subject.