ID theft tax return nightmare

Seven On Your Side
April 10, 2009 8:33:24 PM PDT
The tax deadline is fast approaching and, given the state of the economy, a refund from Uncle Sam would make a lot of people really happy. But imagine you went to file your taxes, and the IRS told you already had. And that someone else had tried to claim your refund. It happened to two men, who then got Seven on their Side.

Eyewitness News reporter Tappy Phillips: "You had never gone to this H&R Block?" Taxpayer Michael Schaaff: "Never." Tappy: "To have your taxes filed?" Schaaff: "Never."

"I had never been to any H&R Block in my life, anywhere in the U.S.," taxpayer Andrew Rak said.

The two men don't know each other, yet both were notified that they had to repay thousands of dollars in refund anticipation loans for tax returns filed at H&R Block branches.

"One thousand, nine hundred ninety-seven dollars they want me to pay back," Schaaff said.

At the two H&R Block offices in Queens, thieves used dummy W-2s and presented phony driver's licenses and then filed tax returns in the two men's names.

Tappy: "You don't have a Connecticut driver's license." Rak: "Never did." Tappy: "The social security number was wrong, which they presented." Rak: "It was my daughter." Tappy: "The income was incorrect." Rak: "Vastly." Tappy: "The employer was incorrect." Rak: "Yes, correct." Tappy: "And none of these things were caught?" Rak: "None of it."

But the return was filed, and the thieves walked out of the H&R Block office with debit cards. Two days later, they were credited with thousands of dollars in refund anticipation loans. Fortunately, the IRS did catch the discrepancies and refused to send the refund. So the bank came after the only names they had for repayment.

"It's insane!" Schaaff said.

Eyewitness News went to both H&R Blocks where the phony returns were filed, and they referred to their corporate office. It said the company requires "one form of photo ID" to file a tax return. And it checks the social security number against a "data base of fraudulent numbers." But they maintain there is "no way a tax professional would know" that both documents were phony.

Both men have filed police reports, but think if H&R Block had been more vigilant, this wouldn't have happened.

"They're making money at the expense of people's privacy, like my own, and that's what got me angry," Rak said.

"This could have definitely been avoided," Schaaff said. "The flags were there. Everything was in place. But yet they still went and did it.


STORY BY: Eyewitness News reporter Tappy Phillips