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Fight back against tax return identity theft

By William E. Lewis Jr.

For the Deseret News

Published: Monday, June 4 2012 1:59 p.m. MDT

Fight back against tax return identity theft.

Internal Revenue Service

Enlarge photo»

SALT LAKE CITY -- While tax time has come and gone for most Americans, hundreds of thousands have reportedly been victimized by the No. 1 crime in United States: identity theft.

Or in the case of the illegally filed income tax return – tax return identity theft.

So lucrative is the crime of tax return identity theft, many drug dealers, armed robbers and gang members, who once relied upon guns to commit crimes, are now putting them away in favor of laptops and blind mail drops.

Tax return identity theft has become so popular that former NFL players William Joseph, Michael Bennett and Louis Gachelin were arrested by the FBI earlier this month and charged with an identity theft and tax fraud scheme. The three former football players are alleged to have filed false tax returns in other people's names and then allegedly stole their refunds.

So lucrative was the crime of tax return identity theft, that Jobson Cenor, a U.S. Marine stationed in Afghanistan, allegedly sold the names, dates of birth, and Social Security numbers of fellow Marines serving our country to a co-conspirator, who used the stolen identities to file tax returns seeking fraudulent refunds.

In this case, Cenor had the names and Social Security numbers of 44 U.S. Marines in his quarters at Camp Leatherneck, Afghanistan, when searched by the Naval Criminal Investigative Service in February. Twenty-one of those names allegedly had illegal tax returns filed against them this year.

The Internal Revenue Service reports that more than 850,000 tax returns were associated with fraudulent refunds and identity theft in 2011. Most victims are unaware they have been victimized until they file their returns. Only at that time do they learn that someone else has already claimed a refund in their name.

This should be of particular concern for Utahns as identity theft complaints have, according to the Federal Trade Commission, more than doubled in the Beehive state since 2010.

At a news conference last month, Rep. Debbie Wasserman Schultz (D-Fla.) and House Judiciary Committee Chairman Lamar Smith (R-Texas) introduced legislation to help combat the growing problem of tax return identity theft.

“Stopping Tax Offenders and Prosecuting Identity Theft Act” - or STOP IT, (H.R. 4362) acts to protect an individual taxpayer as well as groups who have been victimized by tax return identity theft.

If passed, the legislation would require the U.S. Department of Justice to focus on communities that have been hardest hit by the exploding identity theft crisis.

"The federal government must become more vigilant in stopping tax-related identity theft," stated Wasserman Schultz, at a press conference held at the Broward Sheriff’s Office in Fort Lauderdale.

Wasserman Schultz said that the bill will require tougher sentences — a minimum two-year prison sentence for each tax return related identity theft conviction instead of the current up-to-two-year term.

“Millions of Americans who file their taxes expect that they will receive a federal refund," added Lamar Smith in a prepared released. “Unfortunately, rather than collecting their hard-earned cash, many will discover that they have become victims of tax refund identity theft.”

"That would help deter fraud," added Wasserman Schultz.

It is a low-risk crime" that cost taxpayers almost $5.8 billion in fraudulent tax refunds last year.

Local, state and federal law enforcement officials agree that tax return identity theft is running rampant nationwide.

“Two hundred sixty-two thousand fraudulent tax returns and $1.4 billion in losses were prevented nationwide by the Internal Revenue Service last year,” Mike Dobinski, an IRS spokesman, told KSL. “So far, 215,000 fraudulent returns accounting for over $1.15 billion in refunds have been prevented this year.”

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