ADOR Stops Tax Fraud Schemes this Tax Season

Attempted Scams Emerged Same Time as COVID-19

The Arizona Department of Revenue (ADOR) says COVID-19 hasn’t stopped scammers from trying to take advantage of taxpayers.

ADOR’s Criminal Investigation Unit reports since COVID-19 fully emerged in Arizona, 13 tax fraud schemes using stolen or created identities were pinpointed and then stopped. The amount of tax fraud identified so far this calendar year has totaled more than $10 million and is a 50 percent increase compared to the same period last year.

Two schemes that stood out because of the tactics included one that used the stolen identities of young individuals with refund requests ranging from $48 to $5,000. Another attempted scam used the identities of retired or deceased taxpayers to submit fabricated 1099-R forms, which report distributions from pensions, retirement or profit-sharing plans, and annuities. The fraudsters then filed tax refund claims ranging from $109 to $8,999 using the stolen identities.

While being on alert for tax refund fraud is a priority for ADOR 365 days of the year, the department is on heightened alert during tax season as identity thieves use data that may have been stolen through a number of different scams, including over the phone, texts, card-skimming devices, access through unsecured Wi-Fi, stealing mail, hacking email accounts, and phishing schemes.

The Department of Revenue has a proactive fraud prevention system in place that uses advanced machine learning algorithms and increased internal checks and balances. Knowing the face of fraud continues to evolve, the department doesn’t stop adapting and introducing new countermeasures.

The Department of Revenue reports 99 percent of individual income tax returns filed in Arizona are legitimate, but tax refund fraud remains a genuine concern. Since 2015, approximately $130 million in tax refund fraud has been stopped by ADOR’s Criminal Investigation Unit.

 

To help prevent being the victim of identity theft, ADOR recommends the following:

  • Do not carry identification with your social security number (SSN) on it.
  • If someone asks for a social security number, always ask why because it is not always required.
  • Keep personal and confidential information in a secure place.
  • Take extra precautions when discarding personal or confidential information.
  • Protect personal computers, smartphones, and other devices by using anti-virus software.
  • Use strong passwords and never share your passwords. Do not use the same password for multiple accounts/applications.
  • Check your free credit report annually at www.annualcreditreport.com.
  • Monitor wage earnings by examining your statement from the Social Security Administration.
  • Never give personal information through email, social media or text messaging and, unless you initiated the call, never give personal information over the phone.

 

Arizona taxpayers with concerns or have been a victim of tax fraud should contact ADOR’s Identity Theft Call Center at (602) 716-6300, toll-free 1-800-352-4090, or https://azdor.gov/individual-income-tax-information/identity-theft.

For additional information on the Arizona Department of Revenue visit www.azdor.gov

 

 

Monday, May 4, 2020

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