State Stops $78M In Tax Refunds For Identity Theft, Cheats

Posted On September 03, 2014

By Mike Perleberg

taxes-forms.jpg(Indianapolis, Ind.) – Indiana’s Department of Revenue says it has blocked $78 million in wrongfully requested tax refunds issued during the 2014 tax season.

The announcement yesterday indicated that the department’s Special Investigations Unit is working to hold responsible people who filed more than 39,000 returns as attempted identity theft this year. That number is an increase from just 1,500 returns that were stopped in 2013.

“These fraudulent returns include those in which criminals manufactured false identities with stolen elements of identity information and returns in which actual taxpayers’ identities were stolen and fraudulent refunds were requested in their names,” said the IDOR.

Another $39 million in wrongful claims came from legitimate filers who made unsubstantiated claims of specific tax credits or deductions – some mistakes and others potential tax cheats. In those cases, the IDOR adjusted the return checks to the proper amounts, or the taxpayer being put on notice that they owe money to the state.

Of all returns checked for verification, 95 percent were verified and processed as usual.

The IDOR said 30,000 taxpayers took part in an identity confirmation quiz to help the department confirm their identities. The department said most of the survey respondents said they appreciated the additional level of security.