Tampa (the city) has a tax problem

[jcolvin2]

Senate Finance Committee Hearing Today:

http://finance.senate.gov/hearings/hear ... 663b8d35f8

The Tampa detective's prepared testimony is interesting: so many criminals were doing ID theft/tax fraud that the streets of Tampa became safer.

[jg]

According to the testimony of Mr. Steven T. Miller, Deputy Commissioner for Services and Enforcement, Internal Revenue Service ( see http://finance.senate.gov/imo/media/doc ... h20121.pdf )

Overall, IRS identified and prevented the issuance of over $14 billion in fraudulent refunds in 2011. Identity theft is a subset of this overall refund fraud. Since 2008, the IRS has identified more than 460,000 taxpayers who have been affected by identity theft.

Tampa Bay CMSA in 2010 had about 1.36% of the US population ( about 4.2/308.7 million) so that would translate to about $190 million of fraudulent refunds identified and prevented (presuming geographical uniformity).

From the testimony of Mr. Sal Augeri, Detective, Criminal Intelligence Bureau, Tampa Police Department

The IRS is facing a crisis of epic proportion. Criminals are stealing hundreds of millions of dollars from the hard-working Tampa tax payers. And I’m only aware of what’s going on here in Tampa. It won’t be easy, but it must be fixed. To ignore this problem is reckless and a major disservice to Americans.

Detective Augeri may not have a proper perspective on how large the problem is nationally.
Quite possibly Tampa Bay does not really have a much higher incidence of identity theft or tax refund fraud than other areas. Perhaps this is a detection increase and not an actual crime increase. Hundreds of millions of dollars from tax refund fraud seems not out of line with the national averages.

During the Florida Suncoast Chapter's Society of Enrolled Agents - IRS Stakeholders Liaison meeting 1/19/2012 in Tampa we had an active discussion session on the topic of identity theft. The IRS has to carefully unwind cases where multiple returns are filed and procedures have been improved; but there must be adequate processes in place (even though time consuming) to ensure correct resolution.

From conversation with the IRS Criminal Investigation Special Agent presenter, the fall of 2011 efforts by the Tampa local enforcement agencies apparently did not have coordination with federal agents prior to investigation, implementation and arrests by the local police. The police later asked for assistance (sometimes after arrests were made); but, of course, the IRS is barred by statute from providing information regarding fraudulent tax returns to local law enforcement.

The IRS Criminal Investigation Division does not have the requisite manpower or resources to widely confront tax fraud from identity theft and the local polilce department may not have the access to information and expertise to build tax fraud cases that could be used by federal prosecutors.

It is not clear what may come of efforts to better coordinate, but from the testimony of Mr. Steven T. Miller (link above)

It should be noted that the existing rules for protecting taxpayer privacy often make it difficult for us to provide easy access to information that may be useful for local law enforcement. We are, however, developing a procedure by which we will be able to share falsified returns with local law enforcement by way of obtaining a privacy waiver from the innocent taxpayer. We will continue to search for other innovative ways to partner with local law enforcement. Furthermore, CI special agents throughout the country participate in at least 35 task forces and working groups with federal, state, and local law enforcement that target tax related identity theft crimes.

Drug cases seem to be able to be coordinated and convictions obtained; so perhaps there is hope that similar cooperation, time and effort can be applied to the identity theft tax fraud situation.

[jg]

The illegal activity in Tampa is not going unnoticed by law enforcement.

One recent example is at http://www.tampabay.com/news/courts/cri ... es/1232593
Indictment and plea in two Tampa tax fraud cases
By William R. Levesque, Times Staff Writer
In Print: Wednesday, May 30, 2012

The cases are a product of Operation Rainmaker, a yearlong effort by local and federal law enforcement that has intercepted at least 10,000 fraudulent returns worth more than $100 million, federal officials say. In addition to federal agencies, both the Tampa Police Department and Hillsborough County Sheriff's Office are taking part.

May Operation Rainmaker yield a long and bountiful harvest.