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According to a recent report from the General Accounting Office (GAO), identity theft cost the Internal Revenue Service (IRS) more than $5 billion during the 2013 tax year. Today’s ”Fraud of the Day” story, reported in the Atlanta Business Chronicle, details how a brother and sister team used identity theft to file more than $2 million in fraudulent tax returns.

The article states that the siblings operated a tax preparer business that filed hundreds of fraudulent tax returns for the sole purpose of collecting their victims’ tax refund checks. They targeted prisoners and dead people as their victims for obvious reasons. (These two demographics are at risk because they don’t usually file their own tax returns due to serving time in prison or death.) This type of crime generates easy money for criminals because they can file a fraudulent tax return before incarcerated individuals or the family of the deceased can do it. (He who beats the taxpayer to the punch gets the refund.)

The 31-year-old brother and 33-year-old sister pleaded guilty for their roles in the identity theft and tax fraud scheme. They are currently awaiting sentencing.

In contrast to the dismal figures regarding the cost of identity theft, it is also important to consider that the IRS estimates that it prevented more than $24 billion in fraudulent refunds during the same time period. We applaud the efforts of the IRS Criminal Investigation team who tracked these criminals down and prosecuted them for their crimes against taxpayers. This case proves that the Department of Treasury doesn’t put up with greed, deceit or theft and will aggressively pursue those who seek to harm our nation’s tax system and their taxpaying victims.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Georgia Siblings Plead Guilty in Multi-million Dollar Stolen Identity, Tax Fraud Scheme,” written by Phil W. Hudson and published in the Atlanta Business Chronicle on October 13, 2014.

Gregory Allen and Leisha Allen, brother and sister from Jesup, Ga, pled guilty for their roles in a stolen identity and tax fraud scheme operating in Wayne County, Ga.

According to the Department of Justice, the Allen siblings were operators of a fraudulent tax preparer business, B & C Superior Tax Services.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.