What Is Tax Identity Theft and What Are the Repercussions?

 Posted on May 30, 2017 in Identity Theft

Under the federal crime umbrella, tax-related crimes that involve stealing someone’s identity are taken very seriously, just like every other form of identity theft. Anytime someone knowingly, willingly collects someone’s personal information, such as a name and social security number, to gain or conceal profit, they are committing a federal crime and are subject to severe penalties. What Is the Purpose Behind Tax-Related Identity Theft?

While the concept behind stealing someone’s personal information is the same for all forms of identity theft, the purpose behind tax-related identity theft differs. Social security numbers are extremely valuable pieces of personal identification. Criminals use them to open up new credit card accounts, manipulate healthcare policies and a variety of other insurance policies, and to access all kinds of funds that do not belong to them. When a social security number is used for tax-related theft purposes, the goal behind the crime is usually to steal a tax refund or obtain a job of some sort.

How Is the Crime Uncovered?

Tax identity theft is typically discovered when the IRS send an individual a notice that they were paid by a specific employer, but the person does not actually know the employer, or when more than one tax return was filed under their social security number. For example, when tax season rolls around and an individual files their return and does not report a second job, the IRS assumes they have failed to report their total income, and in turn will mail a notice to the person. This alerts the victim that someone else has been using their information for tax purposes. Once the crime is discovered, credit fraud alerts are initiated, identity theft complaints are filed with the Federal Trade Commission (FTC), and then police reports are filed until the crime is completely uncovered and resolved.

What Kind of Penalties Do Tax-Related Identity Theft Crimes Entail?

Tax identity theft is prosecuted by the Department of Justice under established federal statutes. A variety of statutes are in place to enforce penalties for different forms of identity theft, such as the Identity Theft and Assumption Deterrence Act, which prohibits offenders from knowingly using someone else’s means of identification to violate a Federal Law. Depending on the nature of the offense, penalties can include a range of prison time - some offenses have a maximum term of 15 years, while others cost offenders as many as 30 years  - as well as hefty fines. Additionally, offenders are also subject to criminal forfeiture, which includes any personal property that was used or was intended to be used to carry out the offense.

If you have been accused of being involved with a tax-related identity theft activity and are concerned about your rights, future, and reputation, you need to speak with a skilled Chicago federal criminal lawyer right away. Proper counsel and legal representation are crucial in the protection of your best interests. Call the Law Offices of Hal M. Garfinkel LLC, Chicago Criminal Defense Attorney today at 312-629-0669 for a one-on-one consultation.

 

Sources:

https://www.consumer.ftc.gov/articles/0008-tax-related-identity-theft https://www.ftc.gov/node/119459 https://www.justice.gov/criminal-fraud/identity-theft/identity-theft-and-identity-fraud