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Tax schemes are ever-evolving in an attempt to scam or steal taxpayers’ identities, including phishing schemes, card-skimming devices, unsecured Wi-Fi networks, data breaches, computer viruses, unsafe smartphone apps, and hacking email accounts.
The Arizona Department of Revenue (ADOR) remains diligent in detecting and stopping fraud. ADOR fights to shut down fraudulent tax preparers and tax fraud through enhanced staff training and by adopting new countermeasures like advanced analytics with machine learning and artificial intelligence.
Fraud schemes can have different characteristics - large vs. small, complex vs. simple, static vs. evolving over time. The following schemes are a couple examples ADOR has found that attempted to steal from Arizona taxpayers:
The 1099-R scheme continues to evolve year over year. All returns use stolen identities and a fictitious 1099-R with high dollar refunds. So far this year, 407 returns have been stopped requesting nearly $1,400,000 in fraudulent refunds.
This scheme involved electronically submitted returns with W-2s from the same employer. The W-2s had similar wage amounts, and the withholding was unreasonable for the wages reported. ADOR received a total of seven returns requesting over $5,100 in fraudulent refunds. All returns were requesting similar refund amounts to the same banking institution.
Tips to help prevent being the victim of identity theft:
Arizonans can also contact the Department of Revenue’s Identity Theft Call Center at (602) 716-6300, toll-free: 800-352-4090, or https://azdor.gov/individual-
Thursday, May 13, 2021