In the movie, Identity Thief, Sandy Patterson (the ever affable Jason Bateman) has his identity stolen by Diana (the very funny Melissa McCarthy). The result is, of course, played for laughs. In real life, it’s not so funny. Identity theft can cause all kinds of problems – including when it comes to taxes.
Today, the IRS announced the results of an “aggressive enforcement effort” targeting refund fraud caused by identity theft. The sweep resulted in the apprehension of 389 identity theft suspects in 32 states. These efforts lead to 734 enforcement actions in January alone, including 109 arrests, 189 indictments, informations and complaints, as well as 47 search warrants.
You can see a detailed map of enforcement efforts here (downloads as pdf).
The IRS is also targeting check cashers and other money service businesses to help make sure these businesses aren’t assisting in fraud attempts. Nearly 200 businesses have been targeted in “high-risk” areas including Tampa, Miami, New York, Philadelphia, Chicago and Los Angeles.
The plan, according to acting IRS Commissioner Steven Miller is to send a message that the Service is serious about identity theft, which is “one of the biggest challenges facing the IRS today.”
He’s not kidding. Last year, the IRS stopped $20 billion in fraudulent refunds from being issued. That’s a nearly 45% increase from the previous year. The IRS employed nearly 3,000 staffers dedicated to prevent and investigate identity theft-related crimes, more than twice than the previous year.
Convictions are also increasing. In 2012, 223 identity theft suspects were sentenced to prison in 2012, a near 300% boost from 2011. Sentences for convicted identity thieves were also longer: the average jail time increased by a factor of 12. Some identity thieves have received sentences of more than 20 years.
Those steps represent significant steps towards a multi-billion dollar problem.
But it’s not all about the thieves. Acting Commish Miller had a message for victims, too:
I want you to know that we understand your frustration, and we are working hard to get your cases resolved as quickly as we can. We know we have more work to do, and it’s my commitment that we will do everything we can to help victims resolve their cases.
To assist taxpayers, IRS is ramping up outreach efforts. You can find a taxpayer guide to identity theft on the IRS web site for taxpayers whose identities have been compromised or who fear their identities might have been compromised. The guide also offers tips for minimizing your chances of becoming a victim.
The IRS promises to continue efforts to thwart identity thieves while protecting the rights of taxpayers. That may mean that enforcement stings are coming to a town near you.
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