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A small up-front investment would be well worth it if the state can crackdown on and catch cyber criminals who file fraudulent state income tax returns. Last week Department of Revenue Services Commissioner Kevin B. Sullivan and Attorney General George C. Jepsen announced a new initiative aimed at income tax fraud.
As part of its recent deficit-elimination plan for the current fiscal year, the General Assembly set a goal of blocking enough fraudulent returns to save $8.5 million by June 30, the end of the fiscal year. The Department of Revenue Services is seeking $500,000 to purchase the new computer hardware it says it needs to improve income tax screenings and better identify deceptive claims.
Government must keep up technologically with the crooks. Using stolen information to create false identities, cyber criminals receive bogus refunds. The identity thefts also create nightmares for the victims when they file legitimate returns. Mr. Sullivan, in a recent report to the administration of Gov. Malloy, estimated a successful crackdown on fraud could save $10 million annually.
One of the popular swindles, said the attorney general and tax commissioner, is using information from obituaries and subsequent computer hacking to assume a dead person's identity and claim a tax refund before information on the deceased individual is removed from government data bases.
In addition to using more sophisticated equipment, the state expects a public education program will encourage citizens to take steps that will make them less likely to become victims. These include filing tax returns early, particularly if there has been a family death; shredding paperwork with personal information; and never giving out personal information over the phone.
The computer age has reduced paperwork and simplified and speeded up many tasks and transactions, but it has a dangerous side, making identity theft a much bigger problem and opening new opportunities for tech-savvy criminals. State leaders are wise to try to stay ahead of that game.