Justice Department Announces New Directive to Fight Stolen Identity Refund Fraud
The Justice Department’s Tax Division has issued a new directive to further the efforts of the Tax Division and the U.S. Attorneys’ Offices to respond quickly and effectively to the grave challenges in stolen identity refund fraud (SIRF) cases.
Tax Division Directive 144
Tax Division Directive 144, which takes effect on Oct. 1, 2012, will allow prosecutors in U.S. Attorneys’ Offices that designate a point of contact for SIRF cases to open tax-related grand jury investigations, to charge by complaint criminals who are engaged in SIRF crimes and to obtain seizure warrants for forfeiture of criminally derived proceeds arising from SIRF crimes, all without prior authorization from the Tax Division.
To ensure fair and consistent nationwide enforcement of tax laws, the Tax Division has supervision over virtually all criminal proceedings arising under the internal revenue laws. Tax refund fraud involving the use of stolen identities has emerged as fast-growing and insidious crime that is all-too-simple in its execution. Strong coordination at all levels of law enforcement is vital to combating these criminals. The Tax Division has issued Directive 144 to further these coordination efforts.
SIRF Crimes Harm American Taxpayers
SIRF crimes covered by Directive 144 involve the filing or attempted filing of fraudulent tax refund claims, using personal identification information such as Social Security numbers that have either been stolen or are otherwise being unlawfully used. When a stolen identity is used to commit tax refund fraud, tax dollars are paid out to fraudsters and all honest taxpayers are victims. An individual taxpayer whose personal identification information is misused to file false refunds will receive any rightfully due refund from the Internal Revenue Service (IRS), but may nonetheless experience burdens and delays in the process. In specific cases, the most vulnerable in our country have been personally victimized by this form of identity theft, and one recent prosecution resulted in a conviction for the murder of a postal worker by a thief seeking access to erroneous refunds.
Expedited Prosecution Procedures Also Announced
The Tax Division has retained its authority in SIRF cases to review and authorize the filing of charges by indictment and information. Simultaneous with the issuance of Directive 144, the Tax Division has announced new expedited review procedures in cases involving arrests in jurisdictions where the U.S. Attorney’s Office is participating in the procedures established in Directive 144.
SIRF convictions have resulted from the investigative efforts of many local and federal law enforcement agencies. Prosecutions in SIRF cases brought by U.S. Attorneys’ Offices and the Tax Division have resulted in lengthy prison sentences and substantial fines and forfeitures.
It is important that the IRS obtain information, through SIRF investigations, to intercept fraudulent tax refund claims before erroneous refunds are sent to fraudsters. The procedures set out in Directive 144 and the new expedited review procedures are designed to facilitate this goal.
“Directive 144 and the new expedited review procedures are the result of a collaborative effort between the Tax Division and the U.S. Attorneys’ Offices to strengthen law enforcement’s response to stolen identity refund fraud crimes, which are an affront to all honest taxpayers,” said the Tax Division’s Assistant Attorney General, Kathryn Keneally. “The prosecution of these crimes is a national priority, and we will continue to look for the most effective ways to bring this conduct to an end and to punish these wrongdoers.”
“Streamlining the authority to prosecute Stolen Identity Refund Fraud (SIRF) investigations is yet another step toward combating this fast growing crime,” said Richard Weber, Chief, IRS Criminal Investigation. “We look forward to working with the United States Attorneys in aggressively tackling ID theft which has turned the lives of so many innocent taxpayers upside down when their identities have been stolen by thieves whose sole motivation is greed.”
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .
Expedited and Parallel Review of Proposed Indictments Arising from Stolen identity Refund Fraud (PDF)
Directive 144 - Temporary Delegation of Authority to Authorize Grand Jury Investigations, Criminal Complaints, and Seizure Warrants for Certain Offenses Arising from Stolen Identity Refund Fraud (PDF)