Criminal Identity Theft Investigations Increase 66% at IRS

Criminal Identity Theft Investigations Increase 66% at IRS

(Bloomberg) The Internal Revenue Service started 1,492 criminal investigations into the use of tax returns to commit identity theft in the year that ended Sept. 30, a 66 percent increase, the agency said Tuesday.

The data release comes less than a month before the start of the tax-filing season—the time when criminals most often file fake tax returns and claim refunds before legitimate taxpayers can do so.

In a meeting with reporters Wednesday, new IRS Commissioner John Koskinen said curbing identity theft is a priority for the agency.

Rich Weber, chief of criminal investigations at the IRS, said that as recently as two years ago, investigators were devoting less than 5 percent of their resources to identity theft. That’s now about 17 to 19 percent, and about 50 percent in places such as Miami and Tampa, Florida, he said in an interview.

Criminal investigators’ other priorities include offshore tax evasion, public corruption and narcotics, which often involve money laundering.

“We still continue to file significant cases, but obviously if we’re spending more time on ID theft we’re not spending as much time on some of those areas,” Weber said.

The IRS said the number of recommendations for prosecution and sentencings increased in 2013. Investigations totaled 276 in fiscal 2011 and 898 in fiscal 2012.

Among those prosecuted was a Florida woman, Rashia Wilson, who was ordered to forfeit $2.2 million, according to the IRS.

Some lawmakers and the national taxpayer advocates have criticized the IRS’s approach to handling identity theft. They say victims often don’t get enough assistance and that it can take too long to restore their accounts.

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