A Port Chester man fell victim to a new form of identity theft that involves stealing tax refunds.
The 26-year-old victim came into police headquarters on Wednesday to file a complaint. He told police he had his taxes prepared by a Bronx firm on Feb. 10. This week, an accountant from the firm called the victim and told him he needed to call the IRS directly about an identity theft issue.
An IRS agent told the victim a tax return had already been submitted in his name, Lt. James Ladeairous said. The fraudulent tax return used the victim's name, date of birth and social security number, but used a different address.
The IRS referred the victim to its fraud department and advised him to file a local police report. The report creates a record of the complaint with law enforcement, but the IRS takes the lead in such investigations, Ladeairous said.
The IRS calls it "return preparer fraud" and listed it as one of 2012's "Dirty Dozen Tax Schemes" in a warning to the public.
According to an MSNBC report:
"The IRS said it stopped nearly 262,000 fake returns based on identity theft from being processed in 2011, preventing nearly $1.5 billion in refunds from going to criminals. That is more than a fivefold increase from 2010, when the agency stopped about 49,000 fake returns seeking $247 million in fraudulent refunds."
An IRS spokesman said the agency has improved at detecting this new form of fraud, but concedes it will only grow due to the vast amounts of money thieves can potentially claim with fake tax returns.
Authorities arrested more than 100 people in 23 states for tax refund fraud earlier this month.
The IRS lists several warning signs for taxpayers to watch out for when preparing returns, and warns against using firms that promise "larger than normal" tax returns. Taxpayers should also carefully read correspondence from the IRS for discrepancies, the agency says. Click here for IRS advice on how to choose a qualified tax return preparer.
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