Alabama Criminal Defense: Tax Refund Fraud Investigations on the Rise

Posted by Steve Eversole | Mar 13, 2014 | 0 Comments

With increasing access to private data over the Internet, identity theft and computer crimes are becoming more popular—and more heavily prosecuted. In the state of Alabama, law enforcement officers have ramped up their efforts to arrested and prosecute individuals for computer-related crimes. As tax season reaches its apex, federal and state law enforcement officials will be paying attention and scrutinizing tax fraud.

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Stolen identity refund fraud is a rising criminal enterprise involving the use of stolen or appropriated personal information to redirect tax refunds. Authorities claim that these criminal activities are on the rise and that the IRS has pursued nearly 1,500 investigations this year alone. Our Birmingham criminal defense attorneys are dedicated to protecting the rights of individuals who are under investigation or charged with crimes. In addition to providing strategic criminal defense, we also stay abreast of trends in criminal prosecutions in Alabama and nationwide.

Personal information—including Social Security numbers and other tax credentials—in the hands of an identity thief can then be used to file a fake refund. In a recent case, an organization admitted to claiming over $20 million in fake tax refunds. Many of the refunds were obtained by using information of individuals who were incarcerated, drug addicts, or in nursing homes. These names can be found in national law enforcement as well as other data bases.

According to a recent article in the Washington Post, identity theft is a growing area of criminal law and prosecutors are becoming more aggressive when investigating and pursuing related charges. Individuals who are under investigation for identity theft should consult with an experienced defense attorney as soon as possible to protect their rights and reduce penalties in the event of a conviction.

One of the reasons that these crimes are so heavily prosecuted is that they have been costing the government significant tax revenue every year. According to a recent Treasury report, tax fraud cost the government $3.6 billion in fraudulent returns in 2011. In addition to dollars lost, the cases require significant resources and time to resolve each case. The federal law enforcement community has collaborated with the IRS to help prevent identity theft, but acknowledge that the cases are difficult given the number of 3rd parties working on tax returns and handling others' private information, including caretakers or accountants.

In a number of schemes, there will be a conspiracy among several or many people. One may find the individual information and steal it, another prepares the return, and then another cashes the check. The business may also involve legitimate tax preparers. This leaves accountants and other responsible for tax preparation vulnerable to scrutiny by the IRS and law enforcement agencies.

Tax identity theft and refund crimes are also on the rise because they are extremely profitable. The complicated networks and vast number of fraudulent returns can be more lucrative than other illicit businesses, including drug trafficking. The criminal punishments for those arrested and charged can be severe. Defendants convicted may face jail time, federal charges, fines and damages, as well as a lasting criminal record.

If you have been arrested in Birmingham, call Defense Lawyer Steven Eversole at (866) 831-5292.

About the Author

Steve Eversole

Admitted to practice in All State and Federal Courts in Alabama: AllAlabama State Courts, Alabama Supreme Court, Alabama Court of Appeals,Northern...

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