Fraudulent filings: Fake tax returns lead to $19 million in losses

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ATLANTA (WITI) — Tax season is well underway, and this time of year, con artists are coming up with new ways to beat the system.

"They took the identities -- basically names, social security numbers of real people and without those people’s knowledge they filed fraudulent tax refunds," explained U.S. Postal Inspector Nathanial Sims.

In every case, the suspects claimed to be a student and applied for a $1,000 tax credit.

"It was irrespective of whether the person was 85 years old and hadn’t been in school since they were high school or whether the person was 22 years old and was in college," Sims said.

After that, suspects began cold calling victims -- telling them they were entitled to a $500 refund. All they had to do was supply their personal information, and they did.

"They filed a fraudulent tax return, claimed that $1,000 student credit and they requested the IRS do a split refund. They would have the IRS issue a $500 check to the victim, and then they would have the IRS issue $500 to them," Sims explained.

This is why the scheme worked and grew so quickly — victims actually received a check.

"This scheme really spread like wildfire because not only do you have a sort of a plausible explanation that there is this stimulus money that’s available — all you have to do is submit for it, but they are actually paying out on it," Sims said.

Postal inspectors are still investigating the case, but they do know that 15,000 false returns were file and there was more than $19 million dollars in losses.

Victims didn't realize they were scammed until they filed their tax return.

"I've had victims that told me they were evicted from their home because they didn't get the tax return they were expecting," said Sims.

Three suspects were arrested for starting the scheme. Inspectors say they were shocked to discover all the money was gone.

"Most of the money actually just went into lifestyle. It’s not their money, so they didn’t need to be frugal with it, so most of it's just gone," Sims revealed.

The most important takeaway from this — always protect your information.

"If the government is giving out a stimulus, they know your name and they know your social security number. You will be contacted," Sims said.

The three suspects involved in this case are all serving between three and 20 years in federal prison.

1 Comment

  • 2ECOND

    just another reason to go to a flat tax system, bonus is that this country rids itself of the IRS

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