Three Examples of Busted Schemes Showcase Issue

By Arizona Department of Revenue

Identity thieves continue to look for ways to victimize taxpayers including phishing schemes, card-skimming devices, unsecure Wi-Fi networks, data breaches, computer viruses, unsafe smartphone apps, and hacking email accounts.

The Arizona Department of Revenue (ADOR) treats detecting and stopping fraud with paramount importance. ADOR is continuing to combat the evolving landscape of fraud and identity theft through enhanced staff training and by adapting new countermeasures, like advanced analytics with machine learning and artificial intelligence.

The agency’s fraud prevention system has stopped more than $120 million in fraudulent income tax refunds since 2015.

Below are three tax identity schemes intercepted by ADOR that attempted to defraud Arizona taxpayers:

William Scheme: Fraudsters filed 600 refund requests over three months requesting $300,000 in bogus refunds. All the tax returns, which were submitted from Florida, used stolen identities of deceased men with the first name of “William.”

Miami Scheme: Fraudsters mailed 850 fraudulent tax returns between 2015 and 2019 requesting $500,000 in bogus refunds. All envelopes had similar handwriting patterns and were postmarked in Miami, Florida. The stolen identities were typically deceased residents of other states with fictitious Arizona addresses and wages.

Ides of March Scheme: Fraudsters started submitting returns electronically in February 2019, but after these refunds were denied, the fraudsters then switched to submitting paper returns in March 2019. None of the taxpayers lived or worked in Arizona. In total, ADOR identified 18 bogus tax returns requesting $17,000 and were able to link the electronic and paper submissions from characteristics on the returns that were then flagged for further inspection.

Tips to help prevent being the victim of identity theft:

  • Do not carry identification with your Social Security Number (SSN) on it.
  • If someone asks for an SSN, always ask why because it is not always required.
  • Keep personal and confidential information in a secure place.
  • Take extra precautions when discarding personal or confidential information.
  • Protect personal computers, smartphones, and other devices by using anti-virus software.
  • Use strong passwords and never share your passwords.
  • Never give personal information through unencrypted email, social media, or text messaging and, unless you initiated the call, never provide personal information over the phone.

Arizonans can also contact the Department of Revenue’s Identity Theft Call Center at (602) 716-6300, toll free: 800-352-4090, or:
https://azdor.gov/individual-income-tax-information/identity-theft

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