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Everyone uses the Internet to be more efficient. Scam artists use the Internet too, stealing taxpayers' refund money. Some are seasoned criminals who steal taxpayers' identities to claim big refunds. After busting a $100 million tax scam in Tampa, Florida, it was found that drug dealers had turned into tax scam artists.
Stealing & Filing Online
They do not need to leave their home to scam hundreds of taxpayers; all they need is a laptop. With the Internet, scamming people has become easier than ever. Tax scammers steal identities through ID phishing, where they bait people into entering their Social Security Number (SSN), and other personal and financial information, then file a tax return with their identity. To do this, they copy the look of the IRS' web page or a well-known financial institution to fool the Internet user. After about a month, the scammers receive the refund money from the IRS.
Most scam artists dupe hundreds of taxpayers without even encountering their victims. The remoteness between the criminal and the victim makes this crime more dangerous and alluring.
Thieves Scam the Dead
Along with scamming living taxpayers, tax thieves also use the dead for quick money. They research family trees on websites, such as FamilyEcho.com, Ancestry.com, and Geni.com, to get information on the recently deceased. Sometimes they contact people under a disguise to extract information required to file a fraudulent return.
Tax scam artists use the identity of the dead because the discovery of the tax scam is not immediate. When they use a living taxpayer's identity, they come to know of it when the IRS informs them that their tax return has already been filed. In case of the dead, there is no inquiry made.
Tax fraud is a crime that is punished with imprisonment and/or penalties. In one of the biggest cases of tax scams discovered, Tampa, Florida, authorities found that former drug dealers stole more than $100 million from the IRS in fraudulent tax refunds. According to the FBI, the prime suspect accused of the tax scam, Ahmad, "negotiated fraudulent U.S. Treasury refund checks and reloadable debit cards containing fraudulently obtained tax refunds through his store, Empire Street Wear, located at 1925 E. Fletcher Avenue in Tampa."
It took the combined efforts of IRS-CI, FBI, the Tampa Police Department and local law enforcement agencies to uncover this scam. Even though the responsibility of protecting taxpayers lies with the government, along with law enforcement agencies and the IRS working to ensure the safety of taxpayers from tax scammers, taxpayers also can be more careful of what they share online and with whom.