Electronic filing fraud: Latest tax scam's got legs.

Accounting Today, August, 2004 by Gail Perry

Identity theft. Stolen Social Security numbers. Falsified W-2 forms. These are the tools of the fraudulent e-filers. These are "taxpayers" who electronically file fake tax returns asking for refunds to which they're not entitled, so that they can cash in on the quick refund anticipation loans offered by the electronic tax filing services and their associated lenders.

Gary Bell, director of the Office of Refund Crimes in the Internal Revenue Service's criminal investigation unit, warned that this area of fraud is growing rapidly. According to a statement he produced earlier this year, one in every 966 e-filed returns in 2003 was fraudulent. Three years earlier the number of fraudulent e-filed returns was one in 4,789.

Tax preparers at national CPA firms may...