Frank A. Rubino, ESQ.

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FBI's Tax-Fraud Takedown Targets South Florida

The government is focusing renewed attention on a specific type of tax fraud, arresting over 40 people around the country last week. Many of the defendants are from Miami and other cities around South Florida.

In line with a new Department of Justice order expanding law enforcement officers' ability to prosecute identity theft-related tax fraud, the FBI led a special strike team here in South Florida. This team targeted alleged schemes to use other peoples' identities to file fraudulent tax returns.

This is a relatively common scheme. If someone acquires enough of another person's identifying information (usually Social Security numbers), it is possible to file a fake tax return with the government. Then the IRS mails the person a refund based on the fraudulent filing.

Government agencies estimate that these identity theft fraud schemes have cost the IRS over $5.2 billion. Tampa and Miami are apparently big hotspots, together accounting for around $750 million in fraudulent filings.

These schemes are possible because of a loophole in the IRS's electronic filing system. According to the U.S. Government Accountability Office, the IRs does not compare individual tax returns with W-2 forms until after the April 15 filing deadline. By that point, many filers have already submitted returns and cashed their refund checks.

In light of increased awareness of this problem, authorities are stepping up their efforts to catch and prosecute people in these cases.

Source: Miami Herald, "FBI arrests dozens in ID theft-tax fraud take-down in South Florida," Jay Weaver, Oct. 10, 2012 

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Coral Gables Office

Frank A. Rubino, Esq.
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