Secret Service Expects to Make Arrests in Tax Refund Fraud Case

Last month, the Texas Medical Association first reported Texas physicians are victims of a tax refund/identity theft fraud scheme making waves across the nation. The association has since learned the crime's victims also include physician assistants, advanced practice registered nurses, dentists, podiatrists, and pharmacists. Texas is one of 49 states and the District of Columbia affected by this con. 

New Hampshire Medical Society Executive Vice President Scott Colby shared with TMA the following update from the U.S. Secret Service: 

  • The agency is developing leads nationally and internationally.
  • In addition to the Secret Service, federal agencies involved in the investigation include the U.S. Department of Health and Human Services, the Social Security Administration, and the Internal Revenue Service.
  • The Secret Service has identified several suspects and expects to begin making arrests. 
  • The Secret Service said finding those committing the fraud is critical in determining the ultimate source of the suspected data breach. 
  • At this time, there is no solid evidence pointing to the source of the suspected breach. 

The Secret Service recommends all physicians visit and place themselves on a 90-day credit fraud alert. This could potentially slow or halt further attempted identity theft activities. While not every physician is at risk of identity theft, this is a suggested precautionary measure. 

So far, TMA has learned more than 60 Texas physicians have fallen prey to this scam. Please notify TMA if you have been victimized by this scheme. The association can then convey the scope of the situation to the proper authorities. Email the TMA Knowledge Center or call (800) 880-7955. 

The majority of physicians who are victims of this scam first learn of it when they receive an IRS 5071C letter advising them of possible fraud. Others receive a rejection notification when attempting to file their tax return electronically, indicating the tax return cannot be submitted because a return has already been filed under the physician's Social Security number.

The 5071C letter from the IRS has instructions for providing information via the IRS identity theft website. Affected physicians can call the IRS at (800) 830-5084 to let the agency know they did not file the return referred to in the IRS letter. 

In February, the IRS issued a report titled "Dirty Dozen" Tax Scams for 2014 on identity theft affecting tax payers. 

The American Medical Association has the following guidance for fraud victims: 

  • File a paper return, and attach a Form 14039 Identity Theft Affidavit to explain what happened. 
  • Attach copies of the 5071C letter and any other notices from the IRS on this issue.  

Physicians who did not receive a 5071C letter or already have received confirmation of legitimate tax return acceptance most likely are not victims of this year's scam.

If you have not received notice from the IRS but believe your personal information may have been used fraudulently or worry you may have been victimized, call the IRS Identity Protection Specialized Unit at (800) 908-4490. 

If you learn your Social Security number has been used fraudulently, contact the following agencies: 

  • File a complaint with the Federal Trade Commission (FTC), which recommends other immediate steps and provides helpful information on its website
  • Consider filing a police report locally. Provide all documentation available, including any state and federal complaints you filed. This likely will be necessary if financial account fraud occurred as a result of the identity theft. If the only fraud is tax-related, however, the police report will be necessary only if the IRS requests it.
  • Call the Social Security Administration's fraud hotline at (800) 269-0271 to report fraudulent use of your Social Security number. In case your number is being used for fraudulent employment, you also can request your Personal Earnings and Benefit Estimate Statement or call (800) 772-1213. Check it for accuracy.
  • Consult the U.S. Department of Justice website for additional information. 

Also, the FBI has tips to help you protect your personal identity from thieves.  

Action, June 16, 2014

Last Updated On

May 20, 2016

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