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Cox Padmore Skolnik & Shakarchy LLP remains ready to serve you during the COVID-19 pandemic. We are prepared to provide you with continuous legal service and uninterrupted communication. We are also monitoring the legal impact of COVID-19 and we are available to discuss any questions you may have regarding the CARES Act, insurance coverage issues, including business Interruption insurance, or other issues. Please see below for a list of our practice areas. You may contact us by the usual means of telephone and email, which is encouraged at this time. We will promptly respond. Video conferencing is also available. In all, our firm remains committed to assisting you throughout this evolving period of legal, business, and safety concerns.

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  4.  | IRS Claims Fraudulent Tax Returns on the Rise — Accuses Honest Taxpayers

IRS Claims Fraudulent Tax Returns on the Rise — Accuses Honest Taxpayers

| Jul 26, 2012 | Tax Fraud

According to the IRS, over two million tax returns were “potentially fraudulent last year.” If true, this increase would mean a jump of fraudulent tax filings by over 70 percent since last year.

The massive jump in potentially fraudulent filings comes at a time when the IRS is under increased pressure by Congress to promptly issue refunds. As a result, payments are often issued before the tax forms are properly referenced.

This lack of proper reference coupled with additional pressure to stop payment on potentially fraudulent refund claims has resulted in many honest taxpayers finding themselves not only without a refund but also struggling to defend themselves against accusations of fraud.

Honest Taxpayer Accused of Fraud

Although there are many forms of fraud, taxpayers often find themselves addressing one particular area of fraud growing at an alarming rate: identity theft.

For example, one taxpayer attempted to file his taxes only to be told by the IRS that his taxes were already filed and the refund already issued. It turns out his social security number had been stolen and someone else cashed in on his $2,000 refund.

The taxpayer will not receive his refund for another year, and the IRS is completing an intense investigation requiring multiple forms of identification. Although this citizen did nothing wrong, he now finds himself in the middle of a tax fraud investigation.

Such stories are becoming more common. During tax filing season, the IRS held “tens of thousands” of returns listed as potentially fraudulent that were legitimate. This often results in taxpayers waiting months and spending a great deal of time attempting to contact IRS representatives to address the problem.

Source: Ozarks First, “IRS Struggles to Keep Up Amid Surge in Tax Fraud,” June 28, 2012

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