In spite of IRS efforts, tax fraud is growing at a spectacularly fast pace. The Consumer Sentinel Network (CSN), an investigative cyber tool that gives law enforcement members access to millions of consumer complaints, reports that in the year 2012 they received 2 million complaints. Out of those complaints; 52 percent were fraud complaints, 18 percent identity theft complaints, and 30 percent were in other categories. The fact that the CSN is receiving more than a million complaints in a year is a dangerous sign that tax fraud is not being curbed.
The CSN’s database contains over 8 million complaints from 2008 to 2012. For 2012, identity theft topped the charts with 18 percent, followed by debt collection at 10 percent.
Florida was found to have the highest per capita rate of reported identity theft complaints, followed by Georgia and California. According to the report, “Complaints about government documents/benefits fraud increased 27 percentage points since calendar year 2010; tax or wage-related fraud accounted for the growth in this area, with 43.4% of identity theft victims reporting this problem in 2012.”
The IRS stopped close to 5 million fraudulent tax returns in 2012, saving $20 billion in revenue from being stolen. The IRS has provided Identity Protection Personal Identification Numbers to victims of identity theft so that they can prevent it from happening to them again.
In spite of all these measures, tax fraud is still a big threat to taxpayers and the IRS, as recent statistics show. Without introducing further measures to prevent tax fraud and bust tax scammers, there is little hope of a reduction in tax fraud.