Many people wait until the April deadline to file their tax returns electronically. In an increasing number of instances they’re discovering they are unable to submit their return because a scammer has already filed in their name in hopes of collecting their refund.
The Vermont Tax Department says there’s been a significant increase in the number of Vermonters targeted by the tax fraud scheme.
Tax Commissioner Mary Peterson says for the most recent tax year the state has identified 300 such tax returns.
“Were probably running double what we saw last year. We know that it’s a growing problem,” she says.
Peterson says in recent years her department has been using software designed to flag suspicious refunds.
"We're probably running double what we saw last year. We know that it’s a growing problem." Vermont Tax Commissioner Mary Peterson.
“The volume is going up but we never would have been able to keep up with it without some of these modern tools to spot it,” says Peterson. “We’re almost up to $500,000 in refunds that we’ve stopped.”
Peterson says there is no way of knowing how many fraudulent returns are not flagged and how much refund money the state inadvertently sends to people posing as taxpayers.
She says electronic filing has made it easier to submit false returns.
This year, it appears doctors and other medical professionals are being singled out by scammers.
According to Fletcher Allen Health Care in Burlington 44 employees have been victims of the tax fraud scheme.
Dartmouth-Hitchcock Medical Center in Hanover says 50 members of their staff were targeted.
Last week the Vermont Medical Society sent a letter to members alerting them to the problem.
The group has heard from an additional 18 doctors who have been defrauded. Madeleine Mongan of the society says the number is growing daily.
“The people who have reported it in Vermont have been from all types of practices so there doesn’t seem to be a common thread,” says Mongan.
Medical professionals in other states are also being targeted.
It’s not clear where scammers are getting the information they need to file the false returns.
Taxpayers who are victims of the fraud scheme are still entitled to any refund they’re owed if they file the necessary paperwork with the IRS and the state.
Those who believe they’ve been targeted should contact the IRS and the Vermont Tax Department.
