SIRF, for stolen identity refund fraud, is a symptom of our growing digital society. It involves filing electronically via software like TurboTax, fradulent returns on behalf on stolen identities, then using IRS issued debit cards for the refunds to minimize the audit trail.
How big is the problem? Saville quotes Acting IRS Commissioner Steven T. Miller:
“In fiscal 2012, we prevented the issuance of more than $20 billion in refunds that were fraudulent, up from $14 billion the year before,”
“We stopped, before any refund, 5 million suspicious returns this past year, and for the 2013 tax season we’re making dramatic improvements so that we can do an even better job of stopping identity thieves in their tracks.”
“The IP PIN is a unique identifier that shows that a particular taxpayer is the rightful filer of the return,”In 2012 the IRS issued 250,000 IP PINs, and for this filing season in 2013 the IRS has issued 770,000 IP PINs.
As this investigation from Tampa shows, It's taken the IRS a while to get organized but you can imagine the Big Data analytics that are going into crawling credit history databases for identity verification, fraud pattern recognition across tens of millions of returns and then audit trails through the banking and payments networks.
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