Anti-tax fraud agenda: How scammers sabotage scammers

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By: Phil Bradford
on 12th Apr,2016

Basically, you can use some of the best information about how to fend off tax fraud from the scammers themselves.
Anti-tax fraud agenda: How scammers sabotage scammers

When you're in doubt, then you can bank upon the most obnoxious tax crooks ever, to salvage your tax refund money from the hands of their fellow stalemates and prevent getting into the Internal Revenue Services' wrong books. Basically, you can use some of the best information about how to fend off tax fraud from the scammers themselves.

Tax frauds dump IRS over state tax filings

According to an outspoken and stubborn tax fraudster, (a screen name), he found better luck in duping people by filing phony returns at the state level as compared to his previous attempts with the IRS in the past.

As more and more gory stories of tax refund fraud emerge, those involved have shifted their modus operandi from the IRS toward state tax filings. The shift was sparked post the introduction of new fraud filters by Uncle Sam. As a result, scammers found it more difficult to perpetrate at the federal level in comparison to state ones.

New IRS tax fraud prevention stratagem

According to some expert members of a fraud forum, the IRS has employed grievously stringent tactics to validate whether or not the W2 information furnished by the tax filer used the actual Employer Identification Number (EIN). It's a unique tax ID number provided to each company.

To get hold of the EIN, scammers take to social media like LinkedIn in search of their prospective victims' employer information.

EINs ; Get yours here

Truth be told, EINs aren't exactly mined as secrets or confidential as thought to be. Usually, public companies publish their EINs on the very first page of their yearly 10-K papers filed with the Securities Exchange Commission.

But, to get hold of the EINs of millions of small companies isn't cakewalk. Fortunately, a lot of such firms consider their EINs as something private and confidential.

Still, there are organizations like Dun & Bradstreet that specialize in trading access to EINs. For example, ID Theft Service hacked data broker giants and broke into their network for almost six months where Social Security numbers and a host of other crucial data were compromised in favor of identity thieves like Peleus.

The prepaid challenge: Adding fuel to fire?

By May of 2014, some outstanding tax fraudsters worked out some of the most bankable ways to surpass IRS's fraud filters. And interestingly enough, they tasted great success at the state level.

The real catch here is to have the fake refund money transferred to a unique prepaid debit account for every tax return filed. To fulfill this objective, these fraudsters used Green Dot, a popular prepaid card. Hence, with more sophisticated tricks up their sleeves, these scammers could now improve their stats. Instead of using one checking account for every 10 refunds, they started using one Green Dot card for each refund they were making.

In reality, the prepaid card industry has served to be one of the pillars of strength for tax fraudsters, for whom prepaid cards remain an indispensable tool to cash in phony refunds. Moreover, the same cards could well be used for a range of other fraudulent cyber activities.

In this March 2015, the Utah State Tax Commission Chairman, John Valentine, informed the U.S. Senate Finance Committee about all the suspicious returns reported to them so far. As per his narrative, tax refund fraudsters had changed the direct deposition information of the tax filers' previous year's bank account to prepaid debit cards, where most of the changes happened to be Green Dot brand debit cards. He further informed the panel that once a transfer has been made, it is extremely difficult for them to trace or recover the lost booty. Financial tools like these serve to be one of the perfect vehicles to commit tax refund frauds.

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