A former Internal Revenue Service employee this week got 105 months in prison for pleading guilty to theft of government property and aggravated identity theft in a case where the guy tried to get away with nearly $8 million in fraudulent tax returns.
The U.S. Department of Justice said Thomas Richardson used his inside knowledge of IRS operations to commit his crime, which was pretty audacious. According to the DOJ, Richardson admitted that within a two-day period, April 15 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns totaling $7,922,657.
He further admitted that each tax return was filed claiming the married filing jointly selection and listed two taxpayers, husband and wife, the DOJ stated. In each case, the Social Security number reported on the tax returns was assigned to individuals and in most cases, the names on the tax returns matched the names of the individuals to whom the Social Security numbers were assigned.
According to the DOJ, Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson's bank accounts. According to the factual resume filed in the case, the IRS paid out seven refunds totaling $1,865,401 between May 12 and May 19, 2006. All but $30,649 was recouped by the IRS, which he has been ordered to return as well.
Identity theft is a hot button for the IRS, especially coming into tax season. Just last month the IRS and DOJ teamed up for a coast-to-coast crackdown on identity thieves.
The coast-to-coast law enforcement onslaught arrested 105 people in 23 states and included indictments, arrests and the execution of search warrants involving the potential theft of thousands of identities and taxpayer refunds, the IRS stated. In all, 939 criminal charges are included in the 69 indictments and information related to identity theft.
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The IRS said auditors also conducted compliance visits to money service businesses in nine locations across the country in the past week. The approximately 150 visits occurred to help ensure these check-cashing facilities aren't facilitating refund fraud and identity theft, the IRS stated.
The IRS also is taking a number of additional steps this tax season to prevent identity theft and detect refund fraud before it occurs. These efforts include designing new identity theft screening filters that will improve the IRS' ability to spot false returns before they are processed and before a refund is issued, as well as expanded efforts to place identity theft indicators on taxpayer accounts to track and manage identity theft incidents, the agency stated.
The IRS has also created a special section on IRS.gov dedicated to identity theft, including YouTube videos, tips for taxpayers and a special guide to assistance. The information includes how to contact the IRS Identity Protection Specialized Unit and tips to protect against phishing schemes that can lead to identity theft.
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This story, "How to get the IRS' attention: Forge nearly $8 million in tax returns, steal identities" was originally published by Network World.