According to United States Attorney Wifredo Ferre, tax refund fraud has been keeping federal prosecutors busy around South Florida.
“Identity theft and tax refund scams are like a tsunami that is barreling towards us,” Ferre told me.
For scam victims like South Dade’s Lauri King, waiting for help from the IRS is getting harder and harder. She doesn’t know when the agency may get around to mailing out her refund and she worries, “They are overwhelmed… this is something they never planned for, never expected to happen.”
Ferre told me Miami now has the highest fraudulent tax return rate in the nation.
“There have been over 74,000 potentially fraudulent returns filed in Miami resulting in $280 million in bogus returns in 2010,” he added. The city of Miami per capita numbers of fraudulent returns based on ID theft was 46 times the national average… and this is absolutely outrageous.”
Arecent Inspector Generals’ report warned these scams could cost Uncle Sam $21 billion in fraudulent tax refunds over the next five years.
Miami tax lawyer Kevin Packman said federal prosecutors are making progress in arresting the scammers, but he believes more needs to be done to help the victims. He warns that victims like Lauri could still be dealing with this for the next 12-18 months.
The IRS insists that it’s changing procedures by tightening up its electronic processing systems to avoid more scams next season, and it continues to ask victims to be patient while they wait for their legitimate refund checks to be mailed out.
However it still declines comment on what it intends to do next year in order to ensure taxpayers’ refunds end up with the people who earned them, and not the criminals who’ve been so successful in stealing them.
Here are some tips on what you should do to protect yourself against potential tax fraud:
• The IRS does not make electronic contact to taxpayers. Immediately report any electronic communication (such as email, text or social media messages) from sources claiming to be the IRS.
• If you receive an email from anyone claiming to be from the IRS, forward the email to the IRS. • When tossing trash, shred all documents that state your name, address, banking accounts, social security number, etc.
• Never leave your tax return information in places that are easily accessible.
• Acquire identity theft monitoring services like LifeLock.
• When filing electronically, make sure to use a strong password to protect the data file. Once your return has been e-filed, save the file to a CD or flash drive and then delete the personal return information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe.
• When hiring an accountant or tax firm, question them on the measures that will be taken to protect your information.
Remember, identity thieves obtain personal information through stolen wallets and by accessing information from non-secure websites.Therefore, if you lose your wallet, be sure to report it to the police and credit agencies so that they can begin social security and drivers license monitoring.
For more information, visit online at www.irs.gov/uac/Identity-Protection-Tips.
Watch Al Sunshine’s “Money Watch” reports Monday-Friday on CBS4. You may find Al’s blog at www.cbs4.com/category/blogs/al-sunshine
