TROUBLESHOOTERS: Tax identity theft

WILMINGTON, NC (WWAY) — In tonight’s Troubleshooters report, a new twist on identity theft. Year after year, a Wilmington woman has to spend hours on the phone and go through lengthy delays getting her tax refund from the IRS. That’s because someone stole her Social Security Number. They use it to file fraudulent tax returns and steal her refund.

It all started in 2000, when Brooke Hooks’s wallet was stolen while she was on vacation in Florida. The thieves got her Social Security Number and her birthdate and used her information to file a fraudulent tax return. Hooks did not know there was a problem until her tax refund didn’t come back.

“They told me that I had already received a refund, and I told the IRS that that was false,” Hooks said. “And when we started investigating further, we realized there was a duplicate filing, and these people in Florida had filed using my Social and my birthdate to file a return, and they received over $3,000 that year.”

But Hooks didn’t see a dime of her return for two years while the IRS verified her identity.

“They’re asking me to send all this information to prove who I am,” she said. “I have to send copies of my Social Security card, my driver’s license, I have to write a theft affidavit each time to say this is happening and please help me fix it.”

So far, no luck. Hooks just got word that her and her husband’s $10,000 2009 return is being held by the IRS. It’s money they were counting on to help pay for a move across the state later this month.

Adding to the madness, the people who got her money are filing returns using a misspelled version of her maiden name, and that’s not causing the thieves any problems. The authorities have information that could help them track down the con artists, but won’t go after them.

“I’ve called the fraud department of the IRS, who is supposed to be our advocate, and nobody seems to be able to help me,” Hooks said. “They say I’m not experiencing a large enough loss for this to be considered or for anyone to try and find these people who are using my Social.”

The good news is the government is aware of the problem. The bad news there are a lot of victims, the problem has grown exponentially in recent years, and it’s unclear how long it will take to fix the system. Experts estimate that 1.2 million returns filed in 2007 were filed by people using someone else’s Social Security number. That adds up to tens of millions of your tax dollars paid out to crooks.

Even Rep. Mike McIntyre’s office, which has been trying to help Hooks, cannot get a call back from the IRS.

The Treasury Inspector General for Tax Administration, whose sole mission is to protect our tax system from waste, fraud and abuse has been sounding the alarm for at least two years, but the IRS has been slow to respond.

While officials won’t specify what threshold a criminal has to reach before the IRS will go after them, in recent years, only about 50 cases of tax identity theft were recommended for prosecution nationwide. Auditors are concerned there is no real deterrent to keep this problem from spreading.

Categories: New Hanover