If you have heard one fraudulent tax scheme, you have heard them all, right? It usually involves an individual who files false income tax returns for a number of years. But for Ana Bajo of Salinas, California, a few fraudulent tax returns were not enough.
In some cases of tax fraud, identity theft plays a big part. For Ms. Bajo, she and several associates stole the identity information of more than 2,300 people in order to file false tax returns. With the information, Ms. Bajo and her crew invented dependents, educational and other expenses, and tax credits. The group then filed the returns and directed electronic payment to bank accounts created and controlled by the team.
Refund-related identity theft is a serious tax crime for the Internal Revenue Service (IRS). In the past, fraudsters have used IRS e-filing to take control of tax refunds without the knowledge of the victim. Too late, the victim discovers their refund has already been claimed and paid to another party completely unknown to them.
To avoid scammers like Ms. Bajo, the IRS recommends tips to stay ahead of identity thieves, including:
- Be careful not to carry hardcopy documents that can be stolen from you and would reveal your Social Security number or your individual Taxpayer Identification Number (ITIN). Many people carry their Social Security card in their wallet. If you do—now is the time to stop.
- Your Social Security number or ITIN is a valuable piece of personal identification. You should not be asked to provide these numbers for routine transactions. If you are, refuse to provide the information or ask for identify verification through other means.
- Use best practices to secure personal and financial information at work and at home. Online information should be secure, and your Social Security and other hardcopy information should not be readily visible in your home.
- Stay current on home and business cyber security, use full-service protection software and be sure to download patches and updated software versions when available. Stay current on good security practices, like not clicking on fraudulent email or downloading infected documents.
- Be sure not to provide personal, financial, health or other information to people who call on the phone saying they are from your bank, healthcare provider, or other agency. Legitimate callers do not ask for sensitive information over the phone. The same rules apply to the internet.
Thousands of fraudulent tax returns made some big money for Ms. Bajo and her friends. The IRS paid out more than $7.5 million before the fraud was identified through an IRS criminal tax investigation.
For her effort, 43-year old Ms. Bajo is looking at a possible prison sentence of ten years, plus probation, restitution, and money penalties. You may fool the IRS once, but not 2,300 times.
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If you are approached for an IRS audit, the law offices of Robert J. Fedor, Esq., LLC provides decisive legal care. We work with you to find realistic solutions to difficult tax challenges. In Cleveland, Chicago, or nationwide, our tax attorneys deliver strategic help when you face a tax controversy. Call 800-579-0997 or contact us today.