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March 23rd, 2012
03:51 PM ET

Refund Robbery

Law enforcement says it's one of the biggest, most brazen crimes in the U.S. – criminals stealing your tax refund by stealing your identity, going online, and getting the refund money. Police even call it the new "crack cocaine of crime," and in some Florida neighborhoods, it's actually replaced street level drug dealing. Police officials and the Tampa mayor blame the IRS because it allows the refunds to be put on debit cards, and sends out the return before completely checking the information.

For the first time, our investigation shows the fraud as it's happening on the streets of North Miami Beach and Tampa, Florida, we interview two police detectives who are themselves victims, and talk to a police informant who teaches people how to do tax refund fraud. In an exclusive interview, the IRS deputy commissioner says it's a "balancing act" to get the returns out fast to legitimate taxpayers and keep fraudulent ones from going to criminals. The IRS has identified $6.5 billion in ID-related tax refund fraud last year, but does not know how much was going undetected.

"Refund Robbery" is one of four riveting stories you won't want to miss this Sunday on CNN Presents at 8:00 pm ET, replaying at 11:00 pm ET and 2:00 am ET

Filed under: Randi Kaye • refund robbery
soundoff (5 Responses)
  1. Laura Remy

    I would love to see this program. We don't have cable. Can it be viewed through this website?

    April 3, 2012 at 9:57 pm |
  2. Cindy

    I am a victim of "refund robbery." I certainly can prove who I am but you can't visit the IRS like you can with the Social Security Administration or your local Department of Motor Vehicles. I was told it might be 9-12 months before I get my refund and the same over the next 2-3 years. I have used Turbo Tax for 13 years without an issue. The IRS should allow law abiding citizens an opportunity to meet face to face so I can present my documentation and have it verified. I have notified police, put security freezes on the CRA's, filed complaints with the FTC, etc. etc. but the investigation will proceed at the same time I go without reimbursement from the government.
    Thanks CNN for shedding some light on this wave of crime. I am writing letters to my Congressman and Senators.

    April 2, 2012 at 11:22 am |
  3. cuda1234

    Great story. This happens all the time and it adds to the tax gap, which costs us all. A couple of thoughts:

    1) If congress wasn't so determined to use the tax code to redistribute wealth, this wouldn't happen. For many low income people, filing a tax return is like hitting the lottery and that's where the demand comes from.

    2) It was the big box tax retailers that created the market to get this free money fast through refund anticipation loans. They also helped popularize the get-your-refund-on-a-debit-card program so they have some culpability here.

    3) Having dependents is one way to create big refunds so parents need to be aware of this and protect the identity of their kids.

    4) One way to get in front of the curve is to file your tax return early. That way its the crooks who get rejected by the IRS and can't get a refund!

    Please stay on this story and see if you can help solve this problem.


    April 1, 2012 at 2:58 pm |
  4. Patricia Gardner

    My son had his number used 2 years in a row though he was not employed waiting for a disability hearing.I live in Tampa Florida and all legal taxpayers that had their idenity stolen were from different ethinic backgrounds.One idenity theft affected the widow of a slain police officer.In my opinion someone is giving numbers out of hard working Americans. Tampa Florida

    April 1, 2012 at 11:58 am |
  5. Phil

    Great story Randi,

    They online companies like turbo tax can see all the activity.

    The IRS could also limit the number of returns from a computer by identifying the MAC address of the computer.

    Online companies see all this activity and should know the fraud exists, however, they turn a blind eye because they also benefit from the number of returns processed through their site.

    There is no requirement for them to stop or take action for fraud. There are strict rules on Tax Preparers for fraud. So what happens is the criminals go online. It would be very easy for the online companies to identify and prevent a great deal of the fraud and could even alert authorities if they were required to do so.

    I can identify where every return originates by IP address and MAC address of the pc.

    There is no action taken toward the online companies.

    Full disclosure, i am a tax preparer.

    Thanks for your great story.

    March 27, 2012 at 11:37 am |