As the always-busy tax season comes to an end for American taxpayers, preparers, CPAs and other financial experts, it's "business as usual" for the federal Internal Revenue Service. This year, the IRS's focus won't just be on the typical processing of individual, joint and business tax returns, though, since the agency is, through branches in several states, currently investigating nearly 300 instances of tax-related identity theft.
Though identity theft and other tax fraud cases aren't a new phenomenon, these types of criminal investigations have surged in recent years. The IRS itself reports that it investigated nearly 1,500 identity theft instances last year, a 66 percent increase from 2012; these cases have risen 400 percent since 2011. Identity theft cases around the nation have soared in recent years with the enhancements in technology that make it easier than ever to collect and misuse vital information like birth certificates, social security numbers, birthdates and addresses.
According to an IRS press release, there are currently high-volume identity theft and tax fraud investigations going on in several of America's largest cities, including Miami, Tampa and Los Angeles. The cases are in different stages, ranging from initial investigation to arrests, indictments and sentencing. A statement by IRS Commissioner John Koskinen singles out identity theft – particularly attempting to get refunds by using fraudulently prepared tax returns – as a subject of particular concern, saying that the agency was working to "combat the issue on all fronts."
It is too soon to tell if the IRS will have another record-breaking year for identity theft allegations, but one thing is clear: the agency is taking these cases seriously, and is making prosecution of them a priority.
Source: CNN Money, "IRS chasing 300 new identity thieves," Blake Ellis, April 10, 2014.