Identity thieves continue to look for ways to victimize taxpayers 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, officials there say, treats detecting and stopping fraud with paramount importance.
The department continues to combat the evolving landscape of fraud and identity theft through enhanced staff training, and by adopting new countermeasures like advanced analytics with machine learning and artificial intelligence, officials say.
The agency’s fraud prevention system has stopped more than $120 million in fraudulent income tax refunds since 2015, according to a press release.
Three tax identity schemes intercepted by the Department of Revenue are:
The William Scheme: Department of Revenue officials report fraudsters filed 600 refund requests over three months requesting $300,000 in bogus refunds. All the tax returns, which were submitted from Florida, used stolen identities of deceased men with the first name of “William.”
The Miami Scheme: Department of Revenue officials report fraudsters mailed 850 fraudulent tax returns between 2015 and 2019 requesting $500,000 in bogus refunds. All envelopes had similar handwriting patterns and were postmarked in Miami, Florida. The stolen identities were typically deceased residents of other states with fictitious Arizona addresses and wages.
The Ides of March Scheme: Department of Revenue officials report fraudsters started submitting returns electronically in February 2019, but after these refunds were denied, the fraudsters then switched to submitting paper returns in March 2019. None of the taxpayers lived or worked in Arizona.
In total, ADOR identified 18 bogus tax returns requesting $17,000 and were able to link the electronic and paper submissions from characteristics on the returns that were then flagged for further inspection.