Consumer Fraud Task Force Warns Of Income Tax Fraud

March 11, 2014
Consumer Fraud Task ForceSt. Louis, Mo., Feb. 19, 2014 - With cases of tax identity theft on the rise, the Consumer Fraud Task Force is urging consumers to be extremely vigilant in guarding their personal information from potential thieves.

The Internal Revenue Service (IRS) has reported a dramatic increase in the number of criminal investigations related to identity theft, rising from 276 in the 2011 fiscal year to 898 in 2012 and to 1,492 in 2013. The number of those sentenced for ID-related crimes jumped from 80 in fiscal year 2011 to 223 in 2012 and to 438 in 2013.

The Task Force and IRS recommend that consumers be on the lookout for signs that personal information may have been stolen and a thief has used that information to file an illegal tax return. Those signs could include:
  • An IRS notification that you have filed more than one tax return or that someone else has filed using your information.
  • Notification that you are due a refund or owe money for a year you did not file.
  • A notice that you received wages from an employer for whom you never worked.

In recent months, the IRS reported enforcement actions across the nation, including:

  • A man from Los Angeles who was convicted last month of trying to steal nearly $300,000 by filing bogus federal income tax returns without the knowledge of the taxpayers. He was sentenced to 65 months in prison and ordered to pay $140,000 in restitution.
  • A woman from Memphis, Tenn., who was sentenced in December to 13 years in prison and ordered to pay more than $690,000 to the IRS after orchestrating a tax refund scheme involving stolen identities. The IRS said the woman gave the information to accomplices who used it to prepare and file false tax returns with the IRS.
  • A St. Louis woman who was sentenced to 12 years in prison and ordered to pay more than $835,000 in restitution in July after pleading guilty to theft of government funds and aggravated identity theft. In her plea agreement, the woman admitted stealing the identities of more than 400 people, many of whom had died, and filing fraudulent tax returns using their names and Social Security numbers.

A Missouri tax preparer who pleaded guilty to preparing false income tax returns in September.  She faces eight years in federal prison and fines up to $100,000 on each of 98 counts of filing false tax returns and up to $250,000 for identity theft.

The Task Force recommends that taxpayers file returns early, avoid leaving tax forms like We-2s or 1099s in unsecure locations, use secure connections when filing electronically, never disclose Social Security numbers or other sensitive information to strangers via the phone or Internet and thoroughly research tax preparers before doing business with them.

If you’ve been the victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245.

The Task Force is a coalition of local, state and federal government agencies and nonprofit business and consumer groups in Missouri and Illinois that work together to protect consumer and donor rights and guard against fraud.

The Task Force has issued prior alerts on a wide variety of questionable business practices including payday loan offers, tax scams, timeshare reselling fraud, credit repair, bogus sweepstakes, Internet sweetheart scams, home remodeling fraud and others.

To obtain information or to report a scam, you may contact members of the Task Force:

Better Business Bureau Serving Eastern Missouri and Southern Illinois – (314) 645-3300;
Federal Trade Commission – (877) FTC-HELP (382-4357);
Illinois Attorney General – (800) 243-0618;
Missouri Attorney General – (800) 392-8222;
U.S. Attorney, Eastern District of Missouri – (314) 539-2200;
U.S. Postal Inspection Service – (877) 876-2455;
U.S. Secret Service – (314) 539-2238;
Better Business Bureau in Greater Kansas City – (816) 421-7800; Contacts (News Media Only): Michelle Corey, St. Louis BBB President & CEO, 314-645-0606,, or Chris Thetford, BBB Vice President-Communications, 314-584-6743,