Identity theft has been a major point of concern for many Americans over the last decade. Target and other major retailers have experienced data security breaches that have caused consumers concern about unauthorized purchases or other theft of financial assets. But what happens when an identity theft victim’s information is used not to funnel money from the victim themselves, but from the government? That is the scenario that gave way to an 87-month federal prison sentence last week for an Alabama resident, demonstrating that the government does not play games when it comes to stolen identity refund fraud.
According to a Department of Justice press release, Talashia Hinton, also known as LayLay, played a large part in a large-scale scheme that involved stolen identities and fraudulent tax refunds. Last week, she pleaded guilty to one count of aggravated identity theft in an Alabama federal court. In court documents, Prosecutors alleged that Hinton and other co-conspirators illegally obtained more than 7.5 million dollars by falsely filing over 3,000 tax returns that were purportedly due refunds. Unsurprisingly, the tax returns were filed using stolen identities. The indictment also alleged that co-conspirator Keisha Lanier provided Hinton with several stolen and phony IRS electric filing identification numbers that were used to process the bogus returns.
Many of the stolen information came from Tamika Floyd, yet another co-conspirator who stole names and other identifying information from Alabama state databases. Floyd was sentenced to serve more than seven years in a federal prison for her role in the scheme. Lanier is due in court this week to be sentenced. Although Hinton’s sentencing hearing date has not yet been scheduled, she faces many years behind bars and will be subject to the Federal Sentencing Guidelines with regard to charge of aggravated identity theft. In addition to a lengthy stay in a federal penitentiary, Hinton will undoubtedly be ordered to pay penalties, fines, and restitution to the IRS for the refund theft.
This news provides an adequate warning to taxpayers who feel as if they may have had their identities stolen, as well as to those who have engaged in a stolen identity tax refund scheme. The IRS and Department of justice will swiftly and mightily bring down the hammer on those that they believe are engaged in fraud involving tax refunds. The self-reporting nature of the U.S. taxation system requires that U.S. residents be honest when filing their own taxes or while filing on the behalf of others.
When the IRS believes that tax refund fraud may be present, a taxpayer’s file will be transferred to the Service’s Criminal Investigation Division, a specialty group that is trained to sniff out tax criminals. If the CID believes that there is enough evidence to build a criminal case against a taxpayer, the Department of Justice will be called in and a federal indictment will be obtained, leading to a potential showdown in federal court, a place that no taxpayer wants to be.
Many taxpayers think that they can simply talk their way out of a criminal investigation. But in reality, most people give up more information than they should at meetings with examiners or auditors and dig their proverbial hole deeper and deeper. The only way to ensure that you have the best shot of coming out of an IRS criminal investigation unscathed is retaining an experienced tax attorney. IRS CID agents are trained to ask questions that can result in incriminating responses. A tax attorney can help a client stay quiet when he or she ought to.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have extensive experience in representing taxpayers in examinations, criminal investigations, and even litigation. The IRS and DOJ send their best to do battle against those who they investigate, a taxpayer should make sure that they have zealous advocacy on their side of the table, as well. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.