Cyber Crime

Advisory | Prager Metis | Aug 11, 2015

Identity Fraud is on the Rise

In the technological age, we do everything online, from buying groceries to doing our taxes. Although the internet makes our lives easier, and no one can argue the fact that doing your taxes from the comfort of your bed is more relaxing than going to your accountants’ office, the problem is you are opening yourself up to allowing a stranger to obtain your well-earned cash, and you might not even know it’s happening.

Right after this past April 15th newlywed couple Eric and Lauren Oxford were looking forward to starting the rest of their lives together, hoping to move into a home of their own. After saving up for years they were depending on the $3,500 tax refund to secure their financial stability. It wasn’t until Eric logged onto his TurboTax account did he realize something was terribly wrong. His refund had already been filed. The question is, how did this happen? Eric had Anthem’s Blue Cross Blue Shield health insurance, where Eric’s Social Security number was on record. Anthem was recently hacked, having over 80 million contacts stolen, including Eric’s.

Eric and Lauren are still waiting for the IRS to resolve the problem, which could take years. Unfortunately, situations like this have been going on for a long time.

Back in February of 2014, Rashia Wilson proclaimed herself “the queen of IRS tax fraud” on her Facebook profile, after purchasing a $92,000 Audi. The Wilson case highlighted numerous problems within the IRS and how they have been handling identity fraud cases.

According to IRS Commissioner John Koskinen, who had taken office weeks before the Wilson case, stated that “I’ve had a police chief tell me ‘street crime is down because everybody is now filing false IRS returns’”. From gang members to drug dealers, the crimes are now being done online.

Kathryn Keneally, US Assistant Attorney General for the tax division stated that every day more and more cases come in, whether it be military personnel whose identities were stolen whilst deployed or parents whose deceased child’s identity was stolen. What’s scary is those already incarcerated are able to obtain stolen Social Security numbers and file tax returns under it.  International criminals are able to access the government’s Death Master File and steal the identities of the deceased, the fact the list was public stunned Koskinen.

In the Wilson case, she started the scam many years ago and even threatened the government to catch her on her Facebook page. Wilson began filing fraudulent returns in 2009, starting slow only obtaining a few thousand dollars at a time but she got greedy and overly confident which lead to her arrest in 2014.

Currently, the IRS is trying to limit the cases of identity fraud. Starting with providing all those who have been victims a six-digit PIN to file their taxes under. Eric Oxford along with 1.5 million other Americans currently have the PIN. Along with anyone living in the top states of tax-related identity theft, around 30 million people living in Florida, Georgia, and the District of Columbia can access the PIN.

The internet is a luxury that we are lucky to have, but at that same token, just about anyone can access your private information. So be careful out there in cyberspace and keep one eye open for your finances.


Top Ten Year-End Tax Planning Checklist

As the year draws to a close, taking proactive steps in your financial planning can significantly impact your tax liability. This checklist provides a guide to key strategies that individuals can consider before the end of the year to potentially decrease their income tax. By strategically managing income, deductions, and investments, you can optimize your tax situation and position yourself for a more tax-efficient financial future.

Read More »