One of the fastest growing white collar crimes today is that of identity
theft. Approximately 15 million residents of this country have their identities
used fraudulently each year with financial losses of around $50 billion.
This means that about 7% of all adults have their identities stolen with
an average loss of about $3,500. Because of the ever increasing sophistication
level of professional identity thieves that range from individually tailored
phishing scams to successful hacks of both corporate and government databases,
there is an ever increasing threat to all Americans that their identity
may be stolen.
One Florida couple, Donna and James Miller, learned they were part of the
growing number of American taxpayers whose identities were stolen for
tax fraud when they tried to file their tax return earlier this year.
When the couple attempted to file their tax return, their return was blocked
because someone had already used Donna’s Social Security number
to file and obtain a fraudulent tax return. The Miller’s then found
out how ill-equipped the IRS is to deal with identity theft victims.
James Miller stated that he had difficulty getting in touch with the IRS.
His wife, Donna, said every time she would call she would talk with a
different individual, and then, finally, on July 29, she was told to fill
out form 3949-A to report the suspected tax fraud activity. She filled
out the form and mailed it the next day, July 30, and has never heard
back from the IRS.
According to an Inspector General report released on Wednesday, Donna Miller
was instructed to fill out the wrong form. The report estimated that approximately
3,000 of these forms were destroyed “due to a lack of procedures
on how to process these claims. Victims were not notified.” IRS
employees were instructed back in April to have identity theft victims
fill out a Theft Affidavit form. However, as Donna Miller pointed out,
she was told to use the wrong form three months after the problem was
The latest inspector general report concludes that the IRS last year failed
to detect more than $5.2 billion in tax refund fraud nationwide. In the
Tampa area alone, more than $400 million was stolen by tax fraud thieves.
The report also noted that Florida has the highest per-capita rate of
reported identity theft complaints.
The IRS has been overwhelmed by the growing number of identity theft tax
fraud cases in the past couple of years. With budget and employee cuts,
the government agency is unable to keep up with the growing problem. The
report criticized how the IRS handles identity theft victims, too, saying
the agency forces them through a system of unanswered phone calls, conflicting
regulations and untrained employees providing incorrect information. “Communication
between the IRS and victims are limited and confusing.”
As for Donna and James Miller – they are still waiting for not only
their $1,800 tax return, but for a reply from the IRS as well.