The Detroit News has published an extensive report on tax identity theft that is well worth reading, and more than a little scary.
This is not the kind of fraud that results from credit card theft; instead, it is the result of stealing social security numbers, most usually, from the deceased.
The federal Social Security Administration publishes a master death file which lists names,SSNs and places and times of death of the deceased. But what was designed to prevent fraud has now, in some instances, spawned it.
In the Detroit article, a mother explains that a month after the January 2011 death of her 49-year old son, someone in Boca Raton, FL , e-filed a tax return using the son's name and SSN. The refund was then deposited in a Florida account. The mom did not learn of this until her accountant tried, unsuccessfully, to file a tax return on behalf of her son. She eventually collected her son's refund, but only after months of talking it over with the IRS.
Closer to home, WCVB-TV aired a similar story last November about a deceased Cape Cod teenager whose identity was stolen and a phony return filed.
While no state is immune from this crime, one of the national hotbeds is Florida. The Tampa Bay Times last fall ran a story on the arrest of 49 people who allegedly stole identities and used them to obtain millions in from fraudulent tax refunds.
In Massachusetts, the Department of Revenue has purchased the master death file for use in fraud detection. The SSN on every income tax return is checked against the death file. While the filing season is still young, DOR has already intercepted a dozen fraudulent tax returns that came in with SSNs stolen from the deceased.
Multi-agency investigation in two states leads to charges posted on Nov 19
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Top priority: protecting the taxpayer and the Commonwealth’s revenue posted on Oct 8
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