ID thieves find a new way to make money -- your tax return

When he couldn't e-file his taxes online in February, a Bay Village man figured it was a glitch and sent them off by mail.

But when he called last Friday to check on his refund, he discovered the real reason he couldn't e-file: Someone using his name and Social Security number had done it first.

"When this happens to you, you just sort of panic. What do you do?" said the 75-year-old, who asked that his name not be used.

Identity theft-related tax refund fraud more than doubled between 2008 and 2011.

Of the 2.1 million returns the Internal Revenue Service flagged as fraudulent last year, 938,664 were the result of identity theft, according to the Treasury Inspector General for Tax Administration, the office that audits the IRS' performance.

Identity thieves tried to claim about $6.5 billion in refunds, according to the inspector general.

Thieves use the speedy e-filing system to claim inflated refunds before victimized taxpayers can file.

"All they need is your name and Social Security number. All the rest they just make up," said Bay Village Detective Mark Spaetzel.

Not only does the crime fraudulently siphon money from federal and state coffers, it blocks the real taxpayers from having their returns processed and delays legitimate refunds.

Mike Bucalo said he was still waiting for his $788 refund after discovering last month that an identity thief filed a return in his name.

Like other victims, the Akron resident first suspected a problem when tried to e-file and got a pop-up message that said he couldn't file taxes using the same Social Security number more than once in the same year.

IRS employees wouldn't acknowledge it was fraud, Bucalo said, but someone at the agency finally told him that the agency deposited a refund check in a Miami bank in February. The bank account was closed five days later.

"I think people ought to know about this," said Bucalo, who still doesn't know the size of the fraudulent check issued in his name.

The IRS' website said identity theft is a "top priority" for the agency. It's changed the way it screens for suspect returns, and it has beefed up staff. The inspector general said 400 IRS staffers have been assigned to pursue identity theft cases.

Last year, the IRS began assigning victimized taxpayers unique personal ID numbers, or PINs, that should help speed processing of the correct return.

But IRS Inspector General J. Russell George said in congressional hearings last month that the agency isn't doing enough to help victims.

Dan Bell, an electrician whose return was filed by an identity thief in February, said that like his older Bay Village neighbor, he couldn't get the IRS employee to tell him much about the fraudulent return. "She implied it was not a mistake," said Bell. "They're pretty tight-lipped."

Ohio Sen. Sherrod Brown announced last week that he was introducing a bill to increase penalties for tax refund-related identity theft and to speed up refunds to fraud victims, some of whom have had to wait up to a year for returns.

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