Florida is #1 in nation ... In identity theft tax fraud

Florida ranks first in stolen identity tax refund fraud, a problem so pervasive it’s now known as SIRF.

Over the next five years the Internal Revenue Service estimates it will send $26 billion worth of tax refunds to people obtaining them fraudulently, said Cindy Liebes, Federal Trade Commission director of the Southeast region.

Liebes was one of a dozen experts from government and law enforcement agencies who discussed the nation’s growing I.D. theft tax fraud problem Wednesday at the Boca Raton Police Department Training Center.

The FTC, the IRS, the Federal Bureau of Investigation and others fighting the fraud have not figured out why Florida is a hotbed for the crime, where fraudsters file a tax return using someone else’s Social Security number and date of birth. However, the FTC is looking into whether senior citizens are being targeted.

In 2011, 51 percent of the 33,595 I.D. theft complaints Floridians made to the FTC were related to government documents such as tax returns. In 2012, 72 percent of Florida-based complaints were related to tax I.D. theft and benefits fraud, but the total number has not yet been released.

“The IRS is devoting an inordinate amount of resources to trying to stop this. We find it’s gangs moving away from drugs and moving into identity theft. Some are in other countries,” Liebes said.

Jacquelyn Keeley of Boca Raton said she doesn’t know how her identity was stolen, but her credit score was damaged. Someone filed a tax return using her information in 2011, and she wants to know why the IRS didn’t detect it.

“It seems to be there should have been more flags along the way,” Keeley said.

Jose “Tony” Gonzalez, Special Agent in Charge at the IRS Criminal investigation Division in Miami, said in recent months more than 200 people have been indicted and arrested on I.D. theft tax fraud-related charges.

“It is sending a strong message out to the individuals that want to get involved in this,” Gonzalez said.

“Social Security numbers are the key to them being able to commit this crime. We are investigating and trying to find the individuals who are providing these numbers. We see it on the streets every night. They have spiral notepads and thumb drives and lists. They are utilizing those and are filing bad tax returns,” Gonzalez said.

Organizations which have people’s information need to do a better job of protecting it, Gonzalez said.

Blanca Alvarez, Postal Inspector with the U.S. Postal Inspection Service in Miami, said never give your Social Security number or date of birth to any one you have not met in person. It’s no longer necessary to give your Social Security to your doctor’s office, she said.

Retrieve your mail as soon as possible, Alvarez said, and shred any documents that contain sensitive information.

Rep. Ted Deutch, D-Boca Raton, plans to co-sponsor the tax crime and I.D. theft prevention bill introduced on Feb. 6. It calls for 11 provisions such as giving the IRS 90 days to clean the taxpayer’s files after the I.D. theft has been reported, increased penalties, an expansion of the personal identification number system and restricted access to the Death Master File of Social Security numbers.

The bill also seeks up to $50 million a year for local law enforcement to fight tax crimes.

“It’s clear the federal government has to do more to protect consumers from these crimes,” Deutch said.

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