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March 19th, 2012
11:22 PM ET

Video: Exclusive: Tax refund fraud revealed

Criminals across the country are raking in billions of dollars in tax refunds through a new and brazen form of fraud that takes advantage of the IRS's fast online returns, law enforcement officials say.

Using laptops and free Wi-Fi connections, criminals are stealing identities and using the names of legitimate taxpayers to file fraudulent online tax returns. They've raked in billions, buying luxury cars, expensive jewelry and plastic surgery, police said.

"It's like the federal government is putting crack cocaine in candy machines," said Detective Craig Catlin of the North Miami Beach, Florida, Police Department. "It's that easy."

First, thieves obtain Social Security numbers and other personal information from insiders at hospitals, doctor's offices, car dealerships or anywhere the information is stored. Then, they file an online tax return using the real taxpayer's name and a fictitious income. In most cases, the criminals buy a debit card so the IRS can issue the refund on that card, although some thieves have also gotten their returns on actual Treasury checks.

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Filed under: Crime & Punishment • Taxes
soundoff (One Response)
  1. L. Benson

    Tax Refund Fraud.
    THis has been a growing problem for the last 5 years. Too bad the IRS does not use the LexisNexis solution called TAX REFUND INTERCEPT PROGRAM, (TRIP). This would stop 90-95% of this entire issue. This solution verifies the identiy of the tax payer BEFORE a check is sent out. Too bad the IRS is not using this.

    March 21, 2012 at 5:27 am |