Stolen Identity Refund Fraud

ALERT: The IRS does not send unsolicited email, text messages or use social media to discuss your personal tax issue. If you receive a telephone call from someone claiming to be an IRS employee and demanding money, you should consult the IRS Tax Scams/Consumer Alerts webpage: http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts. If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov.

Stolen Identity Refund Fraud (SIRF) Enforcement

One of the Tax Division’s highest priorities is prosecuting people who use stolen identities to steal money from the United States Treasury by filing fake tax returns that claim tax refunds. Working to stop Stolen Identity Refund Fraud, or SIRF, is vital because these schemes threaten to disrupt the orderly administration of the income tax system for hundreds of thousands of law abiding taxpayers and to cost the United States Treasury billions of dollars.

SIRF crimes are complicated to prosecute because they are often perpetrated by large criminal enterprises with individuals at all stages of the scheme: those who steal the Social Security Numbers (SSN) and personal identifying information, those who file false returns with the Internal Revenue Service (IRS), those who facilitate obtaining the refunds, and the masterminds who promote the schemes. These criminal enterprises are able to exploit the speed and relative anonymity of highly automated systems for storing personal information, preparing and filing tax returns electronically, and generating income tax refunds quickly—often in the form of electronic payments.

Identities used in SIRF crimes may be stolen from anywhere. SIRF criminals have used social security numbers stolen from institutions such as hospitals, nursing homes, and public death lists, thereby exploiting some of the most vulnerable members of our communities—the elderly, the infirm, grieving families. However, everyone with a social security number is potentially vulnerable to having their identity stolen. According to the IRS, from 2008 through May of 2012, the Service has identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names.

Typically SIRF perpetrators file the false returns electronically, early in the tax filing season so that the IRS receives the false SIRF return before the legitimate holder of the social security number has time to file their return. The SIRF perpetrators arrange to have the refunds electronically transferred to debit cards or delivered to addresses where they can steal the refund out of the mail.

SIRF crimes cross state borders, and increasingly, national borders. Successfully prosecuting the wrongdoers requires a national strategy of information sharing and coordinated prosecution. The nation-wide reach of the Tax Division’s centralized criminal tax enforcement and its ability to coordinate closely with every United States Attorney’s Office, and through them local law enforcement and police, makes it possible for the Government to respond efficiently and forcefully to the explosion of SIRF crimes. Moreover, the Tax Division has created expedited procedures for working with the United States Attorneys’ Offices on SIRF crimes to ensure the quickest possible investigation and prosecution of these cases. Additionally, the Division works closely with the Internal Revenue Service to quickly share information obtained from our investigations and prosecutions of SIRF cases that the IRS can use to make it more difficult for the schemes to be successful by blocking the refunds from being paid in the first place.

The Tax Division has had considerable success in SIRF prosecutions, which have generated long sentences for those convicted of SIRF crimes. This page contains links to articles, websites, and press releases with information on how the Justice Department and IRS are dealing with SIRF crimes, guidance for citizens whose identities have been stolen and used to file false tax returns, and efforts of the Justice Department to prosecute these crimes.

- Kathryn Keneally, Assistant Attorney General for the Tax Division

Press Release Announcing SIRF Enforcement Initiative

Directive 144

AAG Memo Announcing Expedited Review of SIRF Cases (Sept. 18, 2012)

April 10, 2013
Statement of Assistant Attorney General Keneally before Senate Special Committee on Aging

November 4, 2011
Statement of Deputy Assistant Attorney General for Criminal Matters Ron Cimino before the House Oversight and Government Reform Subcommittee on Government Organization, Efficiency and Financial Management

Latest Press Releases:

April 21, 2015
Convicted Bank Robber, Drug Dealer and Two Others Sentenced to Prison for $1 Million Stolen Identity Tax Refund Fraud Scheme

April 16, 2015
Former Alabama Nightclub Owner and Ringleader of Stolen Identity Tax Refund Fraud Scheme Sentenced to Prison

April 15, 2015
Two Detroit Women Sentenced for Filing False Tax Returns Using Identities of Dead People

April 14, 2015
Two Georgia Men Sentenced to Prison for Stolen Identity Tax Refund Fraud

April 9, 2015
Three Alabama Men Sentenced for Participation in Stolen Identity Refund Fraud Scheme

April 1, 2015
Nine Defendants Plead Guilty in $20 Million Stolen Identity Refund Fraud Ring

March 16, 2015
North Carolina Man Indicted for Filing False Claims for Tax Refunds and Identity Theft

March 13, 2015
Alabama and Georgia Women Plead Guilty to Involvement in $4 Million Stolen Identity Refund Fraud Ring

March 6, 2015
Alabama and Georgia Residents Sentenced to Prison for Their Participation in $3 Million Identity Theft Scheme

February 19, 2015
Washington, D.C., Man Pleads Guilty to Federal Charges in Massive Identity Theft and Tax Fraud Scheme

January 14, 2015
Ringleader of Stolen Identity Refund Fraud Scheme Involving Stolen Medicaid Names Found Guilty

    More SIRF-Related Press Releases

    Links to Identity Theft Information and Resources

     

    Updated April 21, 2015