VIDEO: Identity Thieves Target Tax Refunds

By: Phil Levin Email
By: Phil Levin Email

Thieves are targeting Wisconsin residents in schemes to steal identities and tax refunds.

The Department of Agriculture Trade and Consumer Protection has collected dozens of calls and complaints this year from victims. The perpetrators can use stolen social security numbers to file returns and claim refunds for themselves. Nationwide, the crime cost the Internal Revenue Service about $5.2 billion last year.

Middleton accounting firm Meicher & Associates began encountering the problem last season.

"They were claiming something like a $30,000 refund," said Cindy Hasenfratz, who was surprised when a client had her identity stolen. "The IRS system bounced it by saying that a return had already been filed under that social security number."

Hasenfratz says resolving the contested refund took months and involved sending birth certificate, drivers license, and police report copies to the IRS. Her client was given a PIN number to use with subsequent submissions to prover her identity.

This year Wisconsin is also pursuing tax preparation companies that can be taking advantage of customers. A Milwaukee company offering high-interest holiday loans against tax refunds was found without the proper licenses.

"They typically have a pitch like 'come in for a quick loan, quick holiday cash,' something to get people in the door," said Trade and Consumer Protection Administrator Sandy Chalmers. "They fill out paperwork on their loan, and without knowing it this business will file a tax return on their behalf."

Chalmers and Hasenfratz also say to avoid businesses offering to take out a portion of your refund for their fee, which is illegal.

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