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Patricia O'Connell
Senior Communications Manager

Kirk Nahra Comments on Uptick in ID Theft Tax Fraud Schemes

February 6, 2012

Privacy Practice chair Kirk Nahra was interviewed by Reuters for a story on fraudulent money gained from identity-theft tax fraud schemes that is being kept in U.S. banks.

Reuters reported that The Internal Revenue Service is working with Justice Department's Tax Division and U.S. Attorneys' offices across the country "to target more than 100 people in 23 states suspected of involvement in the theft of thousands of identities and taxpayer refunds. The resulting indictments, arrests and raids were reportedly the result of investigations that had been underway for months or years."

Identity-theft tax fraud schemes often involve using a victim's name, social security number and date of birth to file an online tax return in that person's name, while routing the resulting IRS refund payment to an untraceable bank account.

Mr. Nahra told Reuters that the expansion of electronic tax filing may have contributed to the growth of identity theft-related tax fraud and he added that improving security controls should be a top priority. "The government has encouraged electronic filing, but anytime you have something that is easy to use, quick and fast, that is a recipe for a problem," Mr. Nahra said.