Comptroller Franchot’s Fraud Detection Unit Stops $61 Million in Attempted
Fraud Over Last Six Years
-Number of Fraudulent Returns Identified Increased Exponentially Since 2007-
ANNAPOLIS, Md. (March 13, 2013) – Thanks in large part to a substantial increase in dedicated human and capital resources, Comptroller Peter Franchot today announced that his office has identified more than $61 million in fraudulent refunds since 2007. His commitment to aggressively pursing perpetrators has already stopped $4 million in unearned refunds from leaving state coffers so far this tax season.
Over the last six years, the agency has doubled the staff responsible for detecting fraud and employed the latest technological advancements to scrutinize suspicious returns. As a result, Comptroller Franchot and his staff have seen an exponential increase in the amount of fraud uncovered. In Fiscal Year 2012, the Comptroller’s Office identified 13,480 cases of fraud valued at $28 million compared to only 262 returns, worth $488,657 in Fiscal Year 2007.
“It’s a top priority of my agency to thoroughly investigate returns deemed suspicious and catch those trying to collect money they aren’t entitled to,” said Comptroller Franchot. “We owe it to the vast majority of taxpayers who do the right thing and pay their obligations on time by aggressively cracking down on those who try to cheat the system,” he added.
The agency’s fraud detection team uses high tech methods to scrutinize returns for questionable or fraudulent information before they are processed. If a return is flagged as questionable, it is then manually audited and the refund will be delayed pending a thorough investigation. Once the investigation is completed, the refund will be recalled if it is found to have been obtained through fraudulent information and, working closely with the agency’s Field Enforcement Division and the Attorney General’s office, the tax preparer, taxpayer, or in some case both, will likely face civil and criminal penalties. The Comptroller’s Office also works collaboratively with the Internal Revenue Service, the Postal Inspector and out-of-state revenue and law enforcement agencies to share information and catch multi-state schemes.
“We will continue to be vigilant in our efforts to identify, catch and prosecute tax fraud without causing undue burden for the vast majority of taxpayers who do the right thing, pay their taxes on time and rely on the nationally recognized efficiency and effectiveness of our agency,” Comptroller Franchot said.