Police, tax department continue to see less tax fraud


Fraudulent tax filings continue to be on the decline, according to local law enforcement and the Ohio Department of Taxation.

The City of Delaware Police Department reported last week that since the beginning of the year they have only taken five reports related to fraudulent tax returns. In 2016, police reported they had taken 17 tax fraud returns and in 2015 the police reported 63 reports.

Likewise, the City of Powell Police Department reported that between Jan. 1 and April 15 only three fraudulent tax filings were reported, one fewer than the four reports in 2016 and a sharp decline from the 55 reports taken in 2015.

The Delaware County Sheriff’s Office said that deputies had taken 74 identity theft reports since the start of the year. In the same time last year, deputies took 67 reports and in 2015 deputies investigated 188 reports of stolen identity reports.

Ohio Tax Commissioner Joseph Testa said Friday afternoon that the Ohio Department of Taxation is seeing a continued decrease in fraudulent returns and attributes part of the decrease to some of the system changes the Department of Taxation and the Internal Revenue Service have made in recent years.

Testa said that so far data has shown that the Department of Taxation has handled about one third of the fraudulent returns it handled in 2015.

“That kind of trend really tells us the system is maturing and doing a good job isolating fraudulent filings,” Testa said.

Testa said one system the Department of Taxation implement was a simple online quiz that taxpayers would be directed to if their return seemed suspicious. Testa said the quiz asked for information only the real taxpayer could have like a driver’s license number or information from previous tax returns.

In addition to the quiz, Testa said the IRS reached out and worked with tax filing software vendors and implemented security questions that asked for the filer’s driver’s license or other information.

“I’m happy with the software vendors,” Testa said. “They’ve really entered the fight and set up security checks. All of these things really, really, really help. Is it a deterrent [for criminals]? Sure it is.”

Testa said the IRS encourages cooperation between state taxation offices to share best practices and ideas.

However, a reduction in fraudulent filings does not mean the fight is over, according to Testa.

Testa said fraudulent filers used to file returns asking for thousands of dollars in a tax refund but have begun asking for only hundreds of dollars to avoid detection.

“It’s hard to figure out what their MO is,” Testa said. “We have not seen that much. They were filing dozens or hundreds of returns before and we don’t see that as much. Maybe they realized it isn’t working.”

Testa said the Department of Taxation is working with partners to develop a wider solution that will protect other agencies in addition to the Department of Taxation.

“If they are willing to steal from the tax department, they are willing to steal from others too,” Testa said.

Testa added that the 2017 tax season has been “relatively quiet.”

“It’s been a really good tax season,” Testa said. “We are still seeing attempts. We don’t expect this to stop. We won’t drop our guard.”


By Glenn Battishill

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Glenn Battishill can be reached at 740-413-0903 or on Twitter @BattishillDG.

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