Monday, February 20, 2012
Help Me Howard: Tax Refund Stolen
Your IRS tax refund was stolen. A lot of you watching right now are probably saying, 'That happened to me.' It's happened to many South Floridians, but one woman might be the unluckiest. Two refund checks in a row were stolen. Then, you won't believe what the IRS did. How can you avoid refund troubles? Let's bring in Help Me Howard with Patrick Fraser for some answers.
WSVN -- To use a baseball term, Debra's first strike came when a crook stole her identity.
Debra Tyler, IRS Mess: "They changed my addresses, they canceled all my cards, they re-ordered new ones."
Debra filed the police reports and changed her bank accounts.
Then came strike two, when the crook filed her tax return in 2011 and stole her refund check.
Patrick Fraser: "You think it's the same person who stole your identity?"
Debra Tyler, IRS Mess: "Absolutely."
Debra contacted the IRS and did what they recommended: filled out the paperwork and filed another police report.
Six months later, in November of 2011, good news: The IRS sent out a replacement refund check.
Time for strike three.
Debra Tyler, IRS Mess: "And finally got an agent that knew what she was doing, and she said, 'Uh-oh, I know what the problem is.' I said, 'What's that?' And she said, 'The check was mailed to the wrong address.'"
Two IRS refund checks sent to her. Two checks stolen. What are the odds?
Debra Tyler, IRS Mess: "I have gotten so angry, and then I said I have to calm down, because there is nothing I can do about it."
Debra says the IRS would not tell her the address the second check was sent to. On a document sent to her is the name of a Deara Tyler at this address in North Miami. I went there; the apartment is empty.
Debra Tyler, IRS Mess: "I don't know what to do anymore, because I am at a loss. I have filed everything."
Debra was sent a copy of the second stolen check. It has her correct address on the check, seeming to dispute the IRS employee who told her it was sent to the wrong address.
The second check was forged and appears to have been deposited into an account of a computer company that does not exist.
Debra Tyler, IRS Mess: "I was speechless."
And while Debra was trying to straighten all that out, something you never see in baseball or expect in life: strike four.
The IRS sent Debra this letter, demanding money.
Debra Tyler, IRS Mess: "I get a bill in the mail for $1,000 and change."
The bill from the IRS was for $1,025, to be exact, requiring that Debra pay the interest on the money from the first check that the crook stole.
Debra Tyler, IRS Mess: "Incompetence across the board."
Well Howard, the checks keep getting stolen. So legally, what can an honest taxpayer do if the crooks keep intercepting her refund?
Howard Finkelstein, 7 News Legal Expert: "Legally, the crooks did not steal Debra's money: They stole the government money, your tax money. Therefore, Debra has a right to get her refund. Unfortunately for her, the IRS has to do their investigation, and legally, the IRS can take all the time they feel is needed."
When I spoke to the IRS, they told me that they cannot discuss a taxpayer's returns.
What is clear is the letter to Debra, asking for $1,000 plus interest, should not have been sent out and was a mistake.
It's also clear the second check was stolen and forged. The IRS is investigating, and when they are finished, then Debra will be sent her third refund check, which could take months.
Howard Finkelstein, 7 News Legal Expert: "If you discover your refund is stolen, not only do you need to deal with that. Odds are, your identity has been stolen. Notify the police and the credit bureaus immediately."
Not surprisingly, Debra has lost all confidence in the IRS's ability to get her money to her, and while she waits for the third attempt to get last year's refund, she can't imagine what will happen when she tries to get this year's refund.
Debra Tyler, IRS Mess: "I am worried when I file my 2011 tax return, are they going to withhold the money that they feel they are due, from their mistake?"
Patrick Fraser: "The explosion in the number of people we hear from who are getting their refunds stolen has been incredible, too many to count last year, and we have already heard from dozens of people this year who say they did their taxes and discovered the crooks had already filed for their refund. The IRS has tips to help avoid some of that. Hopefully, you will get your refund the first time. In Debra's case, hopefully, it will eventually be sent to her on the third attempt."
Troubles taxing your patience? Wanna check with us? We will show interest and deliver an answer through your TV.
Top tips every taxpayer should know about identity theft
Identity theft often starts outside of the tax administration system when someone's personal information is stolen or lost. Identity thieves may then use a taxpayer's identity to fraudulently file a tax return and claim a refund. In other cases, the identity thief uses the taxpayer's personal information in order to get a job. The legitimate taxpayer may be unaware that anything has happened until they file their return later in the filing season and discover two returns have been filed using the same Social Security number. These are the IRS' top tips to help you avoid becoming the victim of an identity thief.
1. The IRS does not initiate contact with taxpayers by email or social media tools to request personal or financial information. The IRS does not send emails stating you are being electronically audited or that you are getting a refund. This includes any type of electronic communication, such as text messages and social media channels.
2. If you receive a scam email claiming to be from the IRS, forward it to the IRS at email@example.com
3. Identity thieves access your personal information by many different means, including:
o Stealing your wallet or purse
o Posing as someone who needs information about you through a phone call or email
o Looking through your trash for personal information
o Accessing information you provide to an unsecured Internet site.
4. If you discover a website that claims to be the IRS but does not begin with 'www.irs.gov', forward that link to the IRS at firstname.lastname@example.org
5. To learn how to identify a secure website, visit the Federal Trade Commission's website: http://www.ftc.gov/bcp/edu/microsites/onguard/.
6. If your SSN is stolen, another individual may use it to get a job. That person's employer may report income earned by them to the IRS using your SSN, thus making it appear you did not report all of your income on your tax return.
When this occurs, you should contact the IRS to show the income is not yours. After the IRS authenticates who you are, your tax record will be updated to reflect only your information. The IRS will use this information to minimize future occurrences.
7. Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don't know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice. If you believe the notice is not from the IRS, contact the IRS to determine if the letter is a legitimate IRS notice.
8. If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification, such as a Social Security card, driver's license or passport, along with a copy of a police report and/or a completed IRS Form 14039, Identity Theft Affidavit, available at http://www.irs.gov/pub/irs-pdf/f14039.pdf, which should be faxed to the IRS at 1-978-684-4542. Please be sure to write clearly.
As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490. IPSU hours of Operation: Monday - Friday, 7:00 a.m. - 7:00 p.m. your local time (Alaska & Hawaii follow Pacific Time).
You should also follow FTC's guidance for reporting identity theft: http://www.ftc.gov/bcp/edu/microsites/idtheft/
9. Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your SSN.
10. For more information about identity theft, including information about how to report identity theft, phishing and related fraudulent activity, visit the IRS Identity Theft Protection page at http://www.irs.gov/privacy/article/0,,id=186436,00.html, which you can also find by searching "identity theft" on the IRS.gov home page.
11. IRS impersonation schemes flourish during tax season and can take the form of email, websites, even tweets. Scammers may also use a phone or fax to reach their victims. If you receive a paper letter or notice via mail claiming to be the IRS but you suspect it is a scam, check the IRS phishing page at www.irs.gov/phishing to determine if it is a legitimate IRS notice or letter. If it is a legitimate IRS notice or letter, reply if needed. If the caller or party that sent the paper letter is not legitimate, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484. You may also fax the notice/letter you received plus any related or supporting information to TIGTA. Note: This is not a toll-free FAX number 1-202-927-7018.
12. While preparing your tax return for electronic filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, save the file to a CD or flash drive and then delete the personal return information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe. If working with an accountant, you should query them on what measures they take to protect your information.
13. If you have information about the identity thief that impacted your personal information negatively, file an online complaint with the Internet Crime Complaint Center at http://www.ic3.gov/preventiontips.aspx. The IC3 gives victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 sends every complaint to one or more law enforcement or regulatory agencies that have jurisdiction over the matter.
Information regarding lost or stolen refunds is as follows:
The refund tracing process starts by filing Form 3911, Taxpayer Statement Regarding Refund. The form indicates taxpayers should follow-up with us if they do not hear from us in 6 weeks after filing the From 3911. In most instances of an allegedly stolen and fraudulently negotiated check the taxpayer will be asked to complete and submit a Form FMS 1133. Once this form is filed the process is turned over to the Financial Management Service (FMS) and the investigation is led by the Secret Service. If the intended recipient is found by the Secret Service to have had no involvement in the fraudulently negotiated check then a replacement check can be issued by FMS.
The applicable part of the Internal Revenue Manual (IRMA) goes on to state:
IRM 220.127.116.11 (10-01-2011)
6. The Department of the Treasury delegates to FMS the authority to certify second payments to payees who did not receive their refund checks or whose check was lost, stolen or destroyed. In case of forgery, FMS certifies second payments, issues a refund check, and notifies the IRS ...
To follow-up on the status of refund claims that are being handled by FMS taxpayers should:
Contact the Financial Management Service (FMS) by phone (800) 826-9434 (only English speaking assistance is available on the Check Claims toll free number) or by sending a letter to FMS at the following address:
Department of Treasury
Financial Management Service
Check Claims Branch
P.O. Box 515
Philadelphia, PA 19106
Another avenue is to E-mail: email@example.com
More information about the process can be found at: http://www.fms.treas.gov/checkclaims/questions.html
CONTACT HELP ME HOWARD:
EMAIL: firstname.lastname@example.org (Please include your contact phone number when emailing)
REPORTER: Patrick Fraser at email@example.com