IRS warns of new schemes

ALBANY -- As wage earners across the country gather their W-2's, form 1099s and buy the latest tax preparation software in anticipation of filing its taxes, the Internal Revenue Service is combating several new attempts to defraud both you and the government out of millions of dollars.

Each year, con artists come up with new ways to bilk taxpayers out of their refunds, bank accounts and identities and the ones behind the trickery are becoming more and more tech-savvy, IRS officials say.

Last year in Florida, for example, a Tampa-area police officer discovered that someone had not only stolen his identity, but had used his information to file a false tax return.

His inquiry with the local, state and federal authorities would eventually uncover a massive tax fraud operation that stole $130 million from both the federal government and taxpayers.

Authorities said that investigation yielded luxury vehicles, hundreds of thousands of dollars in treasury checks and thousands in cash.

Some were so brazen as to give classes on how to use popular software to file false tax returns. There was even a rap video on youtube in which someone flashed cash and talked about stealing social security numbers to file false returns, according to The Tampa Tribune.

"It's not something that is limited to Florida," IRS spokesperson Mark Green, who is based in Atlanta, said Friday. "Albany has been a bit of a hotbed for this kind of thing over the years. It started out with people selling people's kids social security numbers to get a larger tax refund, and it just grew from there."

Green said that people often buy the names and social security numbers from homeless people or others and then file false returns.

But he insists that the IRS is trying to put in new measures to thwart identity thieves.

"We have put new measures in place," Green said. "To some degree, we are monitoring more identity theft and are trying to look at things that we might not have ordinarily looked at."

He said that if someone reports their wallet is stolen to a local police department, the IRS in the past wouldn't have gotten involved. But now, if a person's social security number is stolen, it becomes an opportunity for tax fraud.

"So we now can freeze accounts or suspend accounts until we can verify that the person filing the taxes is who they say they are," Green said.

That's one area where some say they run into trouble with the IRS as it pertains to verifying or sharing information.

In the Florida case, for instance, the police officer that ultimately unraveled the whole operation couldn't get his own tax information from the IRS.

Locally, federal agents who often have some degree of involvement with the IRS say the agency is often less than forthcoming with certain information.

Green, who formerly worked with the IRS's Criminal Investigative Division, says, however, to his knowledge, the IRS cooperates to the best extent it can with other agencies, especially when it comes to fraud.

"Here in Georgia, we're working with the Justice Department, local and state authorities to help prevent and investigate as much fraud as possible," Green said.

Green also said that the IRS has created the Identity Protection Specialized Unit to help combat identity fraud and has added new, undisclosed, screening filters and stepped up employee training to be able to ensure that its employees can recognize fraud as con artists become more tech-savvy.

"As much as we're doing, the most important part is still education," Green said. "We have to get out in front of the public and tell them how we do things so that they can spot a fraud before they ever become a victim."

One of the most recent fraud cases involves crooks using text messages and e-mails requesting victims to submit a social security number in order to receive a credit from the IRS.

"The IRS does not, does not, does not solicit personal information via e-mail," Green said.

The IRS has added a new disclaimer at the end of e-mails reminding the public that it doesn't solicit information electronically.

This week, the IRS made public a massive anti-identity theft operation in which it targeted 105 people in 23 states, pressed 939 criminal charges and lodged indictments, arrests and search warrants involving potential theft of thousands of identities and taxpayer refunds.

The agency also conducted a special sweep last week and Monday visiting 150 money services businesses to make sure these businesses are not facilitating identity theft or refund fraud.

And the agency is currently checking more than 250 check-cashing operations through an audit process across the country and is looking for indicators of identity theft as part of the examinations.

In addition to its sweep, the IRS also charged a Louisiana high-schooler with 159 counts of tax-fraud after the 17-year-old was found with social security numbers, addresses and dates of birth of 189 classmates from her Baton Rouge-area school.

"We're committed to staying a step ahead of these people," Green said. "But we need to the public to be diligent and report suspicious activity."