The federal government needs to be more forthright in publicizing reports of criminals who have stolen billions of dollars in Americans' tax refunds by lifting information from TurboTax and similar tax return software, Alabama Revenue Commissioner Julie Magee said Wednesday during an appearance on
Newsmax TV's "America's Forum."
"What you see is that no one really wants to raise alarm on such a global scale, but it needs to be raised, as evidenced by $5.8 billion being diverted last year in refunds," Magee said.
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"The IRS claims they stopped $27 billion in false claims. So, while they are stopping more than they are sending out, it's still too much. Every dollar that goes out on a federal level affects the states, and in Alabama we haven't lost that much money but we think we stopped about $20 million in fraudulent refunds last year alone.
"This year, because of one of the major corporations that offers their services, TurboTax, we know that many of our citizens use TurboTax and they went in this year to file the return and someone had already filed it for them."
Once obtaining taxpayers' data, criminals file a
phony electronic return and direct it to be deposited onto a reloadable debit card.
Alabama is one of some two dozen states working to validate data, such as employer information, contained on tax returns in an attempt to curb the fraud, Magee said.
"It used to be in the old days we just worried about people cheating on their taxes," she said. "Now, that's not the case so much. Now we're worried about somebody stealing your identity to file bogus returns and false refunds, and it's a growing problem because you can't trace these people. It's an untraceable debit card the money's going to."
Magee recommends taxpayers use only electronic software that uses several layers to authenticate a person's identity, as well as request that refunds be distributed on a hard check, because states like Alabama are providing extra scrutiny to debit card refunds.
"That's the fastest way these days. I know it sounds a little ironic."
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