This spring dozens of taxpayers have learned someone else had filed their income taxes and had to start the process of fighting against the fraud.
Residents received letters from the Indiana Department of Revenue and the IRS. They were met with a denial when they tried to file using a Web-based program. Or they got a call from their accountant when they tried to file their taxes.
Next came the headache of calling automated numbers, trying to verify their own identity, filing a police report and wondering what other pieces of their personal information were taken and used.
The reports have slowed in the past month, after the deadline to file income tax returns passed, but more continue to come in. At one point, shortly before the tax-filing deadline, residents were calling the Johnson County Sheriff’s Office nearly every day to report fraud.
The sheriff’s office has taken at least 10 reports, and Franklin police have taken at least 16, officials said. A count wasn’t available in Greenwood.
Local police departments can do little beyond talking with the resident and taking a report, and that is frustrating, Sheriff Doug Cox said.
“Unless a crime occurred here, there is not a thing we can do for folks other than initiate the report,” Cox said.
This year, the number of reports of people fraudulently filing someone else’s tax return is the most local police have seen, Cox said. He suspects the issue is the same statewide.
Identity theft with tax returns was identified as one of the top issues with the IRS this year. The state has identified tax return fraud as an issue as well and last year started a program to address it.
The Indiana Department of Revenue does not have the number of fraud reports for this year because they are still coming in since tax season recently ended, spokeswoman Amanda Stanley said. They aren’t sure why the number of victims appears to be up this year, she said.
Last year, after the state began using an identity protection program that screens for suspicious identities on returns, the state found and stopped more than $8.8 million in fraud, involving nearly 4,200 taxpayers, she said.
As part of that program, more than 224,000 taxpayers were asked to do a quiz to verify their identity, she said.
Once a return has been identified as being suspicious, the state will contact the taxpayer and ask them to verify information and help them determine if a return is fraudulent. If it is determined to be fraud, the resident is told to file a report with his or her local police department, Stanley said.
The cases are aggravating because there is little police can do. The only way local police can pursue a case is if the crime happened here. And that typically isn’t the case, unless a relative got someone’s personal information and filed a return, Cox said.
He said his hope is that filing a report at least allows the victims to talk to someone about what happened. Police also can give residents information on how to monitor their credit.
“We need to take the report. It shows someone cares,” Cox said.
Once a report is filed, the state works with the taxpayers to help them get their return, Stanley said. In local police reports, residents were able to file their tax returns, even after being notified someone else had attempted to file in their name. The state also encourages taxpayers to contact the Indiana Attorney General’s Office identity protection line.
Cox is concerned more people could be victims in the future, especially if the fraudulent returns get filed earlier, even before taxpayers have a chance to file.
The state continues to update its prevention program as more fraudulent cases and patterns are found, with the goal of stopping fraudulent reports now and preventing them in the future, Stanley said.