SIRF's Up! | Citizens Against Government Waste

SIRF's Up!

The WasteWatcher

Unfortunately, the title does not refer to the ideal sea conditions preferred by surfers .  Instead, the acronym SIRF stands for “Stolen Identity Refund Fraud,” a crime that is rising in Florida and beyond, to include nearby Georgia and farther-away Michigan.  Given the Internal Revenue Service’s (IRS’) apparent inability to prevent this crime in the first place, it is likely to spread nationwide, swamping the country like a rogue wave.

The case of Christopher Cordelle Davis, of Montgomery County, Alabama, whose indictment was announced by the Department of Justice on June 12, 2013, is typical.  The indictment alleged that, in September 2011, Davis possessed 600 stolen identities.  In a nutshell, one or more enterprising criminals will steal a social security number (usually from places that require such information during the application process) and file a fraudulent tax return in the name of that legitimate SSN bearer.  Given mandates to turn around electronic filings in a short period of time, the ability to scrutinize questionable returns is limited.  Many of these fraudulent returns slip through the cracks, and those same criminals receive the refunds in the form of debit cards that can be used immediately to purchase goods with these ill-gotten gains.

(Apparently, the IRS recognizes that several tax filers do not have bank accounts, through which to process hard checks or to receive an electronic funds transfer.  Thus, debit cards.)

Citizens Against Government Waste (CAGW) has been studying the SIRF phenomenon for some time now.  The subject was tackled in December 2012, in the monthly WasteWatcher, in a piece entitled “Identity Fraud Hits Taxpayers in the Wallet.”  In May 2013, CAGW published a follow-up, “Tax Refund Fraud and Identity Theft – An Update.”  On June 24, 2013, CAGW issued a press release, “Tax Return Fraud Spiraling Out of Control,” after receiving the news that the IRS had inadvertently sent more than $46 million in tax refunds to “unauthorized” workers at a single Atlanta address.

A Florida-based organization, the Committee for Efficient Government, has been working with CAGW to raise awareness of the issue with federal leaders, while trying to identify a solution to this problem.  By visiting their website, you can familiarize yourself with even more in-depth media coverage.

As of now, the IRS is in the unenviable position of having to pay twice.  First, they pay out to the fraudsters.  Then, for those rightful (and, by circumstance, necessarily tenacious) refund recipients who painstakingly prove that they are the legitimate taxpayers, the IRS must pay again.

Ideally, some mechanism can be developed to present the initial fraud, so that the extreme waste is not perpetuated.  CAGW remains on the case.

Blog Tags: 

Sign Up For Email Updates

Optional Member Code