Victims of tax identity fraud greeted by IRS hassles

5 children from Indy family among latest victims

INDIANAPOLIS - Scammers have stolen the identities of five children from an Indianapolis family, but their mother now joins a growing chorus of complaints about how the nation's tax agency handles an exploding numbers of identity theft cases aimed at stealing tax refunds.

"It's like you're forced to give up because you don't know what else to do," Elizabeth Osorio told the Call 6 Investigators as she provided an inside view of her fight to take her children's identities back.

"I don't feel like I've been helped," she said after filing numerous police reports and placing countless calls to the Internal Revenue Service .

Her purse containing all five children's Social Security cards was stolen during a 2011 shopping trip at the Walmart on West 86th Street in northwest Indianapolis. A stranger immediately began filing tax returns and receiving a larger refund by claiming all five kids as their own dependents.

"I don't know who these people are. They've been using my kids' information to file their tax returns," said Osorio at her family's northwest Indianapolis apartment.

Ever since the purse rip-off, she said she has been paying higher taxes because she is unable to claim her own children as dependents.

"They hit the jackpot," she said of the identity thieves.

The Call 6 Investigators had cameras rolling as she placed some of her recent calls to the IRS. Each time she said she waits up to 20 minutes on hold and then gets various answers about why the problem cannot be solved.

"Based on what the IRS said, these things happen all the time and the only thing they could do is just report it, send it to some kind of database … and not much is being done about it," said Osorio.

A review of local police reports found between four and eight new reports of tax return identity theft being reported each week to Indianapolis police over the past three months.

Another local mother, Heather Humble of Greenwood, told the Call 6 Investigators she has been encountering the same deaf ears as she tries to take back her 4-year-old son's stolen identity.

"It's absolutely ridiculous," she said. "It's so ridiculous that I would have to spend all of this time, energy to prove that my son actually lives with me to claim him, when the person who fraudulently claimed him didn't have to provide a single bit of evidence that the child was in their care at all."

Both women said they grow anxious each year at tax time, bracing for their children to be allowed as dependents on someone else's taxes, while their efforts to once again claim their own children are mishandled or ignored by the IRS.  

Each said the IRS seemed to be making it easier for the fraudsters to file with their children's information, and harder for the true victims to stop it.

The Taxpayer Advocate, an independent arm of the IRS tasked with resolving consumer issues when IRS staff has failed, reported in December that millions of phone calls aren't even getting through to the tax agency.

The report found that only 61 percent of the calls to IRS customer service representatives actually got through in Fiscal Year 2013. A shortage in staff has been blamed by IRS administrators.

A spokesman at the IRS regional headquarters that covers Indiana told the Call 6 Investigators, "It's our No. 1 priority.

"It is something we are focused on. We don't want them to be victimized again," he said.

He declined to answer questions on camera or provide details about specific encounters that have drawn complaints from Indianapolis victims.

In the latest Fiscal Year 2013, the IRS reported it started 1,492 criminal investigations into tax form identity theft, which is a 66 percent jump over the year earlier and nearly seven times the number from 2011.

In an email to the Call 6 Investigators, IRS regional spokesman Luis Garcia wrote:

We apologize if this taxpayer did not receive the quality service she deserves, it's something we try to provide on each of the millions of calls we receive. We appreciate the feedback about this particular taxpayer's experience. And once again, if she’d like to get help from our Taxpayer Assistance Office in downtown Indianapolis or our Taxpayer Advocate please let me know.

Identity theft remains a top priority for the Internal Revenue Service.  We understand that this is a frustrating process for victims and these are among our most complex cases. Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. The IRS is focused on preventing, detecting and resolving identity theft cases as soon as possible. The IRS has more than 3,000 employees working on identity theft cases. We have trained more than 35,000 employees who work with taxpayers to recognize and provide assistance when identity theft occurs.

Victims of identity theft must fill out the IRS Identity Theft Affidavit, Form 14039, immediately and follow the directions on the back of the form that relate to their specific circumstances. 

For victims of identity theft who have previously been in contact with the IRS and have not achieved a resolution, they should contact the IRS Identity Protection Specialized Unit, toll-free, at 1-800-908-4490.

Thank you for the offer but I won't be doing an on-camera interview for your story.

Garcia said whenever a victim calls the main IRS customer service line, employees are trained to switch the calls to a dedicated identity theft office, where strict protocols are followed to ensure that it's taken care of.

That didn’t seem to happen when the Call 6 Investigators recorded Osorio trying one of her latest attempts to reclaim the identities of her five children.

After waiting on hold for 15 to 21 minutes, one IRS was heard arguing with Osorio, while another asked how she could know for sure that the kids were being claimed on someone else's returns.

A loud click was heard when one IRS worker was unable to answer Osorio's questions about how to make sure the kids would not be claimed in yet another tax year.

Osorio exclaimed, "She hung up on me! How rude!"

The same thing happened to Humble in Greenwood.

"She said, 'No, that's all we can do here,' and then hung up on me.

"If they tell people that, 'Hey we understand that this is wrong and that this is happening,' then that means they have to admit that there's some sort of fault in their system, and they're not going to do that because they'd rather cover each other," said Humble.

A 2012 report from the Treasury Inspector General found that identity thieves will be raking in $26 billion in fraudulent tax refunds. The IRS disputes that figure.

Several Indianapolis victims told the Call 6 Investigators that IRS phone representatives instruct them to file local police reports, but then they said the process stalled regardless of following that advice.

Among the other Indianapolis victims filing recent police reports:

  • Jan. 22 in the 1000 block of West 34th Street, a 39-year-old man reported that identity thieves used his identity to file taxes between 2008 and 2010 while he was in prison. He's never filed a tax return in his life, but he told police someone must be getting refunds using his name.
  • Feb. 6 in the 3100 block of North Keystone Avenue, a 26-year-old woman tried to file her taxes and was told her Social Security number had already been used to file a return and claim a refund in her name.
  • Feb. 10 in the 2100 block of North Ritter Avenue, a 56-year-old man said the IRS contacted him and told him to file a police report because someone else had filed tax returns in his name.
  • Feb. 11 in the 1300 block of North Bolton Avenue, a 25-year-old woman said the IRS told her to file a police report that someone had filed for a tax refund in her name.
  • Feb. 12 in the 10100 block of East 42nd Street, a 30-year-old woman told police someone has been using her child's information to file returns in 2013 and now in 2014.
  • Feb. 18 in the 9300 block of Meadowlark Drive, a 25-year-old woman reported that someone used her identity to receive a $2,400 tax refund in her name. She provided police with the bank account number into which the money was deposited.
  • Feb. 19 in the 3400 block of Graceland Avenue, a 29-year-old woman tried to file her taxes and was notified that someone else had already filed in her name.
  • Feb. 20 in the 8400 block of Admirals Landing Way, a 19-year-old woman tried to file her taxes and IRS notified her someone had already filed in her name.
  • Feb. 20 in the 3900 block of East 31st Street, a 21-year-old woman told police she tried to file her taxes and found out someone had already filed in her name and claimed her children as their dependents.
  • Feb. 20 in the 3900 block of East 33rd Street, a 39-year-old woman filed her taxes and discovered someone had already claimed her two children as their dependents. It happened the prior year as well.
  • Feb. 20 in the 15200 block of Proud Truth Drive, a 31-year-old woman called the IRS to inquire about her W-2 forms and was told someone had already filed a return in her name for this year.
  • Feb. 21 in the 1500 block of Central Avenue, a 24-year-old woman was notified that someone had already filed a return in her name, while also listing her kids as their dependents.
  • Feb. 21 in the 8300 block of Wanda Lake Drive, a 49-year-old woman had her tax returns rejected and was notified that someone had already filed in her name.

In the case of Osorio's five children, she said a second federal agency put up additional roadblocks in her efforts to take back her children’s identities.

When she provided the Social Security Administration with copies of police reports, she said the agency would not help her in issuing new Social Security numbers so that her kids could avoid being fraud victims for years to come.

In an email response, Social Security spokesman Doug Nguyen wrote:

A new Social Security Number (SSN) can only be issued if an individual provides evidence that clearly shows the

number holder's (NH) SSN has been misused and that he or she are having ongoing problems because of the misuse. Ms. Osorio has not submitted evidence, other than police reports alleging that her purse was stolen in 2011 and that her children's Social Security Cards were in that purse.  We have no evidence that shows that the SSNs have been misused. 

Arrangements were made to assist Ms. Osorio at the Indianapolis Northwest Social Security Field Office. During her visit on January 17, 2014, we asked her to submit evidence of the alleged misuse. She did not submit evidence of the alleged misuse of the SSNs nor correspondence from the IRS indicating there was a problem with the SSNs. The local office reviewed the SSNs in question and there are no indications of misuse on Social Security's records.

Once Ms. Osorio submits the required evidence, we will review the evidence on a case-by-case basis and decide whether new SSNs can be issued. Until Ms. Osorio submits the required evidence, we cannot appropriately evaluate her request for new SSNs for her and her children.

Please keep in mind that a new Social Security number probably will not solve all of the alleged problems. This is because other governmental agencies (such as the IRS and state motor vehicle agencies) and private businesses (such as banks and credit reporting companies) will have records under the old Social Security number(s).  Along with other personal information, credit reporting companies use the number to identify credit records.  So using a new number will not guarantee a fresh start.

Again, we constantly remind the public to "keep your Social Security card and any other document that shows your Social Security number in a safe place. DO NOT routinely carry your card or other documents that display your number."

For more information, please go to our website at: http://www.socialsecurity.gov/ssnumber .
Osorio said the only reason she was carrying all five Social Security cards is that she had just left a Social Security office.

Garcia, the IRS spokesman, told the Call 6 Investigators that the tax agency requires all identity theft victims to fill out an affidavit certifying that they are victims of fraud.  After that, he said a sort of "freeze" can be placed on a Social Security number that has been used for fraud.

Once the victim has proven their true identity, he said a PIN is issued and that number must be entered any time the victim files taxes in the future.

Both Osorio and Humble said they asked about freezing their children's Social Security number for future taxes, but both women said IRS representatives told them nothing like that could be done.

Humble said, "I was questioning them about whether or not there was some way that they could flag the Social Security number, block it somehow so that when tax time came around again this issue wouldn't arise a third or fourth time, and they told me there was nothing they could do for me," adding that she was then promptly hung up on.

When asked why an identity theft victim would be told they could not freeze the tax accounts for their children, Garcia suggested that IRS staff never actually said that, adding, "That’s not the way it works."

Garcia, who is based at the Detroit IRS office, said anyone who merely suspects that their Social Security number has been used fraudulently can request a freeze and a PIN for the future filing of taxes.

He also said that any taxpayer who feels dissatisfied with how the IRS handled their identity theft case can get the independent Taxpayer Advocate Service office involved. 

The agency's most recent report stated it got involved in some 220,000 cases in 2012, with 77 percent of those being resolved.

Some members of Congress have expressed growing concerns in recent months over how the IRS handles or misses the mark with consumer issues, but some of those critics' political foes point out that Congress is the one that keeps cutting funding for the agency.

For Osorio's family, it's yet another tax season filled with stress as she anticipates a criminal using her children's identity once again while she goes without that tax benefit. 

"It's been three years that me and my children are being affected by this," she said.

"When it happened the first time, it never should have happened again the second time because it should have been proven that these people don't have enough information on the children," said Osorio.

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