Federal officials are investigating at least one case of attempted tax fraud involving a Costa Rican expat family. There are likely more victims here.
The U.S. Internal Revenue Service said that someone filed a fraudulent 2015 tax return in the name of an American family living in Costa Rica and then sought a $7,000 tax refund.
This is not an uncommon crime, although overseas Americans are highly vulnerable because many do not file tax returns by the normal April 15 date.
The Internal Revenue Service allows taxpayers to open up electronic accounts and to make their tax filings online using a name and a Social Security number.
The agency is investigating a number of such crimes. Last week federal authorities arrested five out of 10 defendants who have been charged in identity theft cases related to an international money laundering scheme that laundered millions of dollars in fraudulently obtained federal income tax refunds.
According to the affidavits supporting the complaints, the Internal Revenue Service has identified approximately 7,000 fraudulent tax returns related to this scheme that sought about $38 million in refunds. The IRS issued about $14 million in refunds, and the money was deposited into and laundered through bank accounts used in this scheme. The fraudulent tax returns were filed and the bank accounts were opened with personal identifying information that had been stolen from thousands of victims, said the U.S. Attorney’s Office in the Central District of California, based in Los Angeles.
The 10 defendants, each of whom was named in a separate criminal complaint, used fraudulent foreign passports to commit identity theft by opening numerous bank accounts and mailbox addresses with the stolen identities, said the U.S. Attorney’s Office. According to the criminal complaints, they used fraudulent passports from the Republic of Armenia, Georgia and the Czech Republic that had the names of identity theft victims but the defendants’ photographs.
Agents arrested five defendants last week, and five still are being sought.
The IRS is double checking tax returns with unusual requests for refunds by making contact with taxpayers. The taxpayers are asked by letter to contact a special IRS telephone number.
Some expats will not become aware that they have been identity fraud victims until they try to file their 2015 tax returns electronically. The computer system blocks the accounts of persons whose tax returns already have been filed. Those who have been victims have to file the tax returns by mail along with a form outlining the crime.
In the case of the confirmed fraud here the crooks used an easily available Social Security number but also used the address of a mail courier service in Miami.
Persons who believe they have been victims can contact IRS Criminal Investigation at (213) 200-3083 or Homeland Security Investigations at (866) DHS-2-ICE.
The Internal Revenue Service has instructions online for those who have been victims. The instructions include contacting the three major U.S. credit reporting services.