Tis The Season For Tax Fraud - My9 New Jersey

Tis The Season For Tax Fraud

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Trenton, New Jersey (My9NJ) -

This time of year, a new crime is running rampant and people need to beware. Criminals are stealing people’s identities, filing their tax returns as that person and are getting refunded by the IRS.

The way this scam works is the criminals steal people’s names and social security numbers and then create a fake W2 form with large withholdings in order to make the tax refund as large as possible. Then the fraudulent filers file their taxes in early January because they know that most people wait until the deadline, April 15th, to file their taxes. In order to collect the payment, these criminals then submit a fake address or buy a prepaid credit card and just wait for the IRS to send them the money.

Handal Cherenfant, a Long Island Tax refund fraud victim, who also works in a hospital, said that this was a nightmare for him. “They actually found out that there was a claim out and they stated that they were unable to give me the information, but they had to put me through a full task, meaning, have to rerun my name and had to get a new identity,” he said.

Fred LaMarca, a certified public accountant who works for Potter and LaMarca LLP said that it has happened to two of his clients. “We went to go file his return, and somebody already used his social security number and they took his refunds and estimated payments and gave it to the thief that filed the fraudulent taxes,” he said.

People who are affected by fraud filers do eventually get their refunds back; however, it does take about 10 months for the IRS to fully fix this problem. The problem has gotten bigger as the years go on, and the IRS is having trouble stopping it. The IRS ends up paying twice the amount; the fraudulent claim and then the real claim.

Last year alone, the IRS paid $3.6 billion in fraudulent tax returns filings and it is predicted that in the next 5 years, the IRS will have paid $21 billion to these tax fraud thieves.

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