Robert J. Fedor, Esq., L.L.C.

Reports indicate that more MDs are being targeted by tax fraud

While it might seem hard to believe, tax fraud is rapidly becoming something of an epidemic here in the U.S. If you don't believe it, consider that figures from the Treasury Inspector General's office reveal that the Internal Revenue Service paid out almost $4 billion in counterfeit tax refunds in 2012 alone.

What makes this all the more unsettling is that experts say the crime is actually relatively easy to commit, as people either steal or purchase stolen personal data -- names, Social Security numbers, etc. -- and then use it to electronically file false tax returns promising otherwise hefty refunds. These refunds, in turn, are then directed into a bank account and later withdrawn via ATM.

While the final figures are still out on the number of fraudulent tax returns filed in 2013, there are already indications that we are going to see similar -- if not higher -- numbers. For instance, multiple news agencies are now reporting on a significant uptick in the number of physicians victimized by tax fraud.

The story, which originally broke on the highly-regarded cyber security blog KrebsOnSecurity, indicates that multiple medical associations across the country are reporting that physicians and other registered members have complained about receiving letters from the IRS informing them that someone had already filed a tax return in their name.

  • The Maine Medical Association reported over 30 cases 
  • The North Carolina Medical Association reported 100 cases 
  • The New Hampshire Medical Association reported over 100 cases

These recorded incidents -- plus reports from Arizona, Connecticut, Indiana, Michigan, and Vermont -- have prompted many to speculate that the tax fraud may have originated from an as yet undetected data breach at a national organization in charge of credentialing or certifications for physicians.

Still others are theorizing that this plus the recently detected Heartbleed OpenSourceSSL bug may have created the ideal conditions to perpetrate tax fraud against physicians, whose stolen personal information could potentially net larger tax refunds without raising red flags.

It will be interesting to see what steps, if any, the IRS considers implementing in the aftermath of this report ...

Remember to consider speaking with an experienced legal professional if you are under investigation or have been falsely accused of tax fraud

Source: Fox Business, "Report: Rise in tax fraud against doctors hints at possible new data breach," Kate Rogers, April 23, 2014; KrebsOnSecurity, "States: Spike in tax fraud against doctors," April 14, 2014  

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