Alabama woman charged with $7.5 million tax identity theft
IRS adds efforts to aid tax ID victims, catch international tax cyber crooks
Sunday, May 17, 2015
Talashia Hinton was arrested May 12 for her alleged part of a stolen identity federal tax refund ring that filed more than 3,000 false tax returns claiming more than $7.5 million in fraudulent refunds.
The number of returns and amount of potentially lost tax money are both notable, but it's the dollars that earn this week's By the Numbers (dis)honor.
The charges against the Phenix City, Alabama, resident arose from a scheme in 2012 and 2013, according to the indictment. Hinton, who court documents say also goes by LayLay and LaLa, faces one count of conspiracy to defraud the United States, five counts of wire fraud and five counts of aggravated identity theft.
If convicted, Hinton faces a statutory maximum sentence of 20 years in prison for each wire fraud count, a statutory maximum sentence of five years in prison for the conspiracy count and a mandatory minimum sentence of two years in prison for aggravated identity theft. Hinton also faces monetary penalties, including fines, forfeiture and restitution.
Federal investigators say in the indictment that Hinton was part of ring in which she allegedly got Internal Revenue Service electronic filing identification numbers and stolen identities so she could prepare and file false tax returns to claim illegal refunds. Hinton allegedly directed the IRS to pay the fraudulent refunds in either U.S. Treasury checks or as deposits onto prepaid debit cards.
The schemes in which Hinton is accused of participating is, sadly, not uncommon. Despite IRS efforts, tax fraud continues to pose a major problem. And the crime has cost the U.S. Treasury millions over the years.
Added costs for victims: Although the official federal documents that announce the capture of alleged tax criminals focus on the crimes' overall cost to Uncle Sam, there also are huge costs for taxpayers whose identities are stolen.
For the immediate tax year, they face delays -- of months and sometimes years -- in receiving the refunds to which they're entitled. This is a particular problem for filers who depend on their tax refunds to make ends meet or pay down debt.
Tax identity theft victims also have to deal with the ramifications for filing years to come.
The problems that honest taxpayers endure because of tax criminals refund fraud schemes has been a concern of the IRS for years. The agency has been criticized for its inconsistent dealings with the crime and how it helps victims.
New IRS effort to help tax ID theft victims: To remedy that, the IRS is forming a new group that will consolidate operations that will handle identity theft claims, as well as combine them with compliance operations, according to Denise Davis, accounts manager (centralized identity theft coordination) for the IRS Wage and Investment Division.
The goal, Davis told attendees at a May 8 meeting American Bar Association Section of Taxation meeting in Washington, D.C. (and reported by Tax Analysts), is to provide "consistent treatment" of victims of tax-related identity theft.
"The plan is to move all identity theft and return preparer misconduct victim assistance activity [into] a new organization," Davis said. "This new organization is [designed] to centralize the identity theft programs in a new identity theft victim's assistance organization that will be part of the Accounts Management program."
International tax crime fighting: IRS efforts to combat tax crimes got another boost a few days later when the head of the agency's Criminal Investigation division announced that it will build up the capabilities to investigate and prosecute large-scale, multi-jurisdictional and international tax identity fraud operations.
"Sometimes a case can start out with a smaller dollar amount and then lead into a much larger type of a theft," Criminal Investigation Chief Richard Weber told reporters during a May 11 conference call. "So we are looking at not just dollar amounts, initially, but whether or not the cases are multi-jurisdictional, across different field offices across the country."
IRS criminal investigators already have been looking at wider-ranging tax crimes. The division's Fiscal Year 2014 report shows that the 4,297 cases brought covered international tax fraud, return preparer and questionable refund fraud, identity theft, public corruption, bank secrecy act violations, significant money laundering investigations and terrorist financing cases. And many of the unit's cases involved some digital element.
New tax cybercrime fighters: Weber noted that over the years the Criminal Investigation (CI) unit has hired a number of special agents with cyber-technology investigative skills. These agents are part of a new specialized cybercrimes group, which will include a unit in D.C. and contacts in each of the IRS' 25 field offices across the nation.
They cybercrime agents also will work with other federal agencies to unravel tax schemes. Inter-agency work will involve the Secret Service, the FBI, the Justice Department and the Department of Homeland Security that have expertise in these types of investigations.
IRS CI will focus on cases involving tax administration, identity theft and money laundering, while the other agencies will focus more on the data breach itself. "Then we'll see where this takes us and the types of cases that we're going to be able to bring," said Weber.
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