Identity Theft the New Tax Fraud

One of the most common forms of criminal tax crime is when a taxpayer files a tax return containing fraudulent income information.  This is often referred to as criminal tax evasion, as the filer is attempting to evade paying taxes on income earned.    However, white-collar criminal lawyers have seen an increase in recent years of another form of tax crime – identity theft. 

Criminal identity theft occurs when someone’s identifying information such as their name, social security number and date of birth is stolen.  This is typically done in order to steal from the victim by using their name, social security number and date of birth to access their bank accounts, or to obtain credit under their name, with no intention to repay. 

Criminal attorneys say a common variation of this identity theft scheme now involves perpetrators applying for tax refunds under another person’s name.  This tax fraud has become so common that the Internal Revenue Service has issued warnings to U.S. taxpayers in recent days to not provide personal information to anyone without confirming their identity. 

Alleged offenders will contact taxpayers via telephone, email, or even Facebook, indicating they are employees of the IRS and need to confirm the taxpayer’s name and social security number in order to process their refund.  Many unsuspecting taxpayers provide this identifying information, not knowing that they are in reality providing information to someone that intends to use it for a crime.   Once this information is in the wrong hands, the offender will apply for tax returns in the taxpayers name using the real name and social security number, but with fraudulent income information.  Once the refund is provided to the fake tax filer, it can cause problem with the true taxpayer, and could even cause them to become the target of a criminal tax fraud or tax evasion investigation. 

If you are being wrongly investigated for tax evasion or tax fraud, it could be that someone stole your name and social security number, forged your signature, and filed a fraudulent tax return.  You could be the victim of Identity Theft.

Likewise, many tax preparers are being investigated for Identity Theft for filing tax returns for customers, which contain fraudulent income information.  When these customers are ultimately investigated for tax evasion, they try to blame it on their tax preparer, accountant or tax service and claim they never provided the false information and never signed their return.  In some cases that may actually be true and they may really be innocent of tax evasion, but victim’s of Identity theft.