(Corrects paragraph 8 to say Velasquez worked in San Diego
district attorney's office but not as a prosecutor)
By Patrick Temple-West
WASHINGTON Feb 18 Kev Imandoust guards his U.S.
Social Security number with 25-character passwords and email
encryption software. But in 2012, the San Diego accountant
became one of more than a million Americans whose identities
were stolen to use for tax refund fraud.
When he tried to file his taxes days before the April 15
deadline two years ago, Imandoust had his return rejected by the
Internal Revenue Service. Someone in Florida had filed using his
name and Social Security number, the IRS said.
It took several months for Imandoust to prove he was a
victim and free up his $750 tax refund. Now 34, he may never
know how his identity was stolen. He suspects weak security
controls at a business that held his information.
Some 1.6 million Americans were victims of ID theft tax
refund crimes in the first half of 2013, up from 1.2 million in
all of 2012, the IRS watchdog, the Treasury Inspector General
for Tax Administration (TIGTA), said in a November report.
Scammers typically file phony electronic tax forms for IRS
refunds using stolen names and the Social Security numbers used
to identify Americans in what TIGTA chief J. Russell George last
November branded "a growing epidemic."
Tax professionals predict another season of similar scams
despite government efforts to curb them. In fiscal year 2013
which ended Sept. 30, a total of 438 individuals were sentenced
to an average 38 months for identity theft tax refund fraud, the
IRS said in January. This compared with 223 individuals
sentenced to an average 48 months in fiscal 2012.
"It's still too financially lucrative and too hard to get
caught," said Eva Velasquez, president and CEO of the Identity
Theft Resource Center, a nonprofit group that helps identity
"Everything is indicating that the levels are either going
to stay flat, which is very bad, or they're going to increase,"
said Velasquez, who formerly worked in the San Diego district
Nina Olson, who as National Taxpayer Advocate defends
taxpayers' rights within the IRS, said she expected it would
take another year before the number of fraud cases started to go
TAX SEASON UNDER WAY
On Jan. 31 Americans began filing 2013 tax returns, due by
April 15. In the first week of tax season, the IRS issued about
19.5 million refunds, up 18.5 percent over the comparable period
last year, the IRS said. The average refund this year is $3,317,
up from $3,170 last year.
Scammers typically make their bogus filings early in tax
season before targeted taxpayers file their returns, industry
professionals said. TIGTA found they submit multiple filings
from the same address, sometimes from abroad.
This year, the IRS is implementing new filters to catch
bogus filings. "We will have more flexibility to stay ahead of
identity thieves," IRS Commissioner John Koskinen told Congress
The IRS is using data analytics to spot suspicious tax
refunds and is screening specifically for refunds filed from the
same address, he said.
Mark Steber, chief tax officer at tax preparation company
Jackson Hewitt Tax Service Inc, predicted "another
bad year, no better, no worse." Last year Jackson Hewitt
reported to the IRS a refund fraud ring in Seattle that was
filing dozens of tax returns with stolen identities to claim
about $9,000 on each refund.
"The IRS has beefed up, (but) so have the criminals," Steber
(Reporting by Patrick Temple-West; Editing by Howard Goller and