A report released last November said that the US government paid $4 billion in bogus tax refunds in 2013. The report revealed that all the tax refund scam artists needed to commit their billion dollar crimes was an internet connection and a stolen identity.
“I’ve been on calls with Alabama, Chicago, some other field divisions, where they’re now experiencing people who were from Florida and now moving to other states to conduct this same type of fraud. Based on the parameters that are in place now, it’s very difficult to stop,” said FBI Supervisory Special Agent Jay Bernardo.
Once the thieves stole enough Social Security numbers, all they had to do was file fraudulent tax returns using the stolen information. Some scammers would file multiple false returns thereby multiplying their chance to see which returns would shake out.
IRS Commissioner John Koskinen told a House subcommittee, “Part of what’s happening is people are reverse engineering. You know, you file a thousand fraudulent returns and then you see which ones go through. … They can adjust faster than we can adjust.”
The federal government said that it had conducted an estimated 1,500 criminal investigations into identity theft in fiscal year 2013. That 1,500 investigation results in a 66% increase from the previous year.
Even US Attorney Eric Holder was targeted in the tax scheme. Holder hasn’t blamed this on racism, yet.
So there you have it. That’s another $4 billion in reasons for you to feel safe at night knowing that the federal government is out there doing a bang-up job at ensuring your cyber safety.
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