Mushrooming Tax Identity Fraud in Florida Leads the Nation

Tax identity fraud is sweeping the Sunshine State, an in-depth Reuters'?story in Sunday's Chicago Tribune attests.Criminals are claiming refunds by using stolen names and Social Security numbers to file phony electronic tax forms. They get away with it because the Internal Revenue Service is a slow-moving federal bureaucracy, unable to collect the money before victims of the identity theft -- or the IRS -- discover they've been had.Officials in the U.S. Treasury Department say tax identity fraud has mushroomed into a massive -- and dangerous -- illegal industry that could cost the country $21 billion over the next five years. Victims have actually been killed to get at their identity details.The Tribune admits that $21 billion is small potatoes compared to the $1.1 trillion collected from individual taxpayers in 2012, but the amount and frequency the crime has been growing incrementally over the last three years.Wifredo Ferrer, United States attorney for South Florida, is quoted as saying, "We are on the top of a national trend that is causing a hemorrhage of tax dollars." He called it "a tsunami of fraud."

Although the IRS says it has detected cases in every state except North Dakota and West Virginia, the epicenter of the problem is Florida, and most of it is concentrated in Miami and Tampa.

Miami has 46 times the per-capita rate of false tax refund claims than the rest of the country, and 70 times the national average in dollar terms, Ferrer told Reuters.Nationwide, the number of cases of tax identity theft detected by authorities skyrocketed to more than 1.2 million cases in 2012 from only 48,000 in 2008, according to the Treasury Department. The reason why so many of those cases are in Florida, the department presumes, is because of the large number of vulnerable senior citizens in the state.

Florda victims have varied from hospital patients to Holocaust survivors at an elderly Jewish community center, as well as active duty military serving overseas, the Tribune reports.The real number of phony tax filings is likely much higher than 1.2 million, because the fraud is hard to track, according to a November General Accountability Office report."It's one of the biggest challenges that faces the IRS today," Acting IRS Commissioner Steven Miller said. "We're doing much better on all fronts but we have much more to do."Reuters' David Adams is the author of the Tribune story.

Reach Nancy Smith at nsmith@sunshinestatenews.com or at (850) 727-0859.

Source: http://www.sunshinestatenews.com/story/tax-identity-fraud-mushrooming-florida-leads-nation

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