RALEIGH — The victims of stolen-identity tax refund fraud are real people, not just statistics. Two of them, whose names came up in a Carolina Journal investigation into tax refund fraud, are Jody A. Freed, of Slatington, Pa., and Evan Russell, who lives in Raleigh.
CJ‘s investigation of SIRF originated from a tip from a Durham retiree who discovered that the mailbox at his home was being used as a drop site for a tax fraud scheme. Further reporting has expanded to include the retiree’s neighbors, and now, residents in Pennsylvania and Raleigh. The reporting has unearthed refunds from the federal government and from revenue departments in several states, including North Carolina.
Until CJ contacted Freed, she did not know she was a SIRF victim. On April 2, the Durham homeowner on Sherron Road who first brought the tax-fraud scheme to CJ’s attention found correspondence in his mailbox from the IRS office in Birmingham, Ala., addressed to a Jody A. Freed. In a separate envelope was a $4,108.08 IRS tax refund check made out to a person with that name.
Two days later, the homeowner received a letter from the N.C. Department of Revenue addressed to a Jody Freed. It said the department could not process Freed’s return and that it must be resubmitted with W-2 and 1099 forms as well as a copy of Freed’s IRS tax return form. The document did not include Freed’s full Social Security number, only the last four digits.
CJ contacted a number of people named Jody Freed and located, in Slatington, Pa., a woman whose last four Social Security numbers matched those in the North Carolina document.
She said that, due to an injury, she qualified for and has been receiving federal disability benefits for the last few years, but has not filed a tax return because she was not required to do so.
While she has suffered no financial loss from the identity theft, she realizes she might encounter problems in the near future. “Didn’t the federal government know it is sending me disability checks under the Social Security number that it just issued a refund to?” she asked.
Evan Russell, 27, the manager of the Gorman Street Pub in Raleigh, also is a victim of SIRF. Russell told CJ that in early March he filed his federal and North Carolina tax returns using TurboTax preparation software and expected a federal refund of approximately $1,000.
His return was accepted initially, but later he got a notice saying it was denied because his Social Security number had been used for an earlier filing. Thinking he must have made an error in completing the return, he went to an H&R Block office and had it handle his refund filing. H&R Block also received a notice that the Social Security number had been used.
An H&R Block employee showed him how to file a fraud report with the IRS, which required that he download a form from the IRS website, enclose copies of his driver’s license and Social Security card, and mail the information to an IRS office in Kansas City. An IRS representative later told Russell that his name and Social Security number had been used to produce a $5,500 tax refund that went to an address in Georgia.
Russell said that after he learned about the IRS issue, his bank notified him that someone in Ontario, Canada, had tried to make a $700 withdrawal from his account. He also got a notice from Google that someone had hacked into his email account and that he needed to change his password.
At press time, Russell said he had not communicated with N.C. Revenue Department officials and doesn’t know if the same fraudsters made an attempt to get money from the state of North Carolina using his name. He said he had calculated his North Carolina refund to be $83.
Don Carrington is executive editor of Carolina Journal.