Editorial
Give tax swindlers reason to be afraid
By: TBO.COM Staff |
Published: May 24, 2012
Any honest taxpayer would dread an IRS audit, yet the cheats stealing billions from the overworked tax agency don't appear worried about getting caught.
Local police complain that even if they find someone in possession of all the paraphernalia needed for major tax fraud — a long list of Social Security numbers and addresses, debit and credit cards in other peoples' names, and tax forms — there's little they can do unless they can prove money was stolen.
As The Tampa Tribune's Elaine Silvestrini reported Sunday, prosecuting tax fraud is difficult at the local level. Most tax data is confidential, so without federal help, police can't find out if someone has misused the personal information of others, even if all signs point that way.
The state Legislature should look into how to make the unauthorized possession of personal data a crime under certain compromising conditions. Care needs to be taken to allow for the many legitimate uses of this information.
But the real problem in putting fraud operators in prison is not the lack of a tight state law. The problem is a lack of manpower at the federal level to police a complex tax system that distributes money based largely on the honor system.
In one form of easy tax theft, thousands of foreign workers, some here illegally, are getting tax credits for children who may live in other countries or may have never been born. TV station WTHR in Indianapolis has reported that one Mexican worker applied for and got credits totaling nearly $30,000 for 20 children supposedly living with him in a single mobile home in Indiana. The man told the reporter the children were actually in Mexico.
He could get the credits without listing Social Security numbers because the IRS says it has no authority to demand that people asking for refunds prove they're here legally. The U.S. House recently passed a measure to require that everyone claiming a child credit must also list a Social Security number for every child. How else can you even be sure the children exist? What took lawmakers so long to figure that out?
To access your bank account online or to deal with your credit card company, you often have to answer a secret question set up when you opened or updated your account, maybe your mother's maiden name or your town of birth. The IRS doesn't have similar safeguards. It just sends money to the address where you say you live, or to the account you say is yours.
In recent congressional testimony, the IRS said it was looking into better security, but that it wouldn't be cheap. But current practices aren't cheap for taxpayers. The Treasury Inspector General for Tax Administration estimates that at the present rate, the IRS will hand out $26 billion in fraudulent refunds over the next five years.
In a recent study, 75 percent of taxpayers trying to telephone the IRS couldn't get through. The agency is reported to have shifted workers from identity-fraud cases to general phone-answering duty.
No wonder the scammers are so audacious. In one case in Hillsborough County, a man in jail for second-degree murder used the name and Social Security number of his deceased victim to file a phony return with the IRS. The IRS says it got 190,000 returns suspected of being fraudulent from prisoners.
Just stopping payment of fraudulent filings isn't enough. Police and sheriff's deputies need more help building cases.
Undocumented workers trying to keep a low profile shouldn't feel safe filing bogus returns.
Stealing from the U.S. Treasury should cease to be an entry-level crime.
Tampa Bay Online
