September 19, 2023
For many people, tax season has come and gone. Your taxes were filed, your refund was cashed (or you paid your dues), and you’ve already begun tracking expenses for 2017.
For other Coloradoans, however, the wait for a refund continues. If you are one of these taxpayers and asked for your refund to be directly deposited into your account, it may be time to check the mail.
Why? Because in mid-May, the Colorado Department of Revenue announced that they would be sending a substantial amount of paper refunds to taxpayers who had asked to receive them through direct deposit.
Earlier in the year, members from the department contacted some taxpayers, asking them to verify their identity before they could get their tax return. While the additional hoops to jump through and the delays may be unexpected and even frustrating for taxpayers, the Department of Revenue has a good reason: they want to cut down on tax return-related fraud.
Colorado and Tax Fraud
As billions of dollars and millions of taxpayers’ personal information is being sent around the country, some of it ends up in the wrong hands. Because of this, more than 500,000 people were the victims of federal tax fraud in 2015. In 2016, that number decreased to 237,758, but even though the number of victims was cut in half, hundreds of thousands of people still had their identities stolen during tax season.
By sending paper tax refunds, rather than using electronic means, the Department of Revenue could be assured that the refund was going to the applicant’s home address and not to a foreign bank account. Forcing people to go to the bank, show ID, and cash the refund in person helps the Department of Revenue to cut down on fraud even further.
At least, that’s the hope.
So if your direct deposit didn’t show up and you still haven’t received your tax refund in the mail, you may want to contact legal authorities. Because you may be the victim of tax fraud. The IRS has forms and contact information on their website for victims to report identity theft or suspicious activity.
How Does Tax Fraud Work?
Tax season is a prime time for people to steal personal information. By using a person’s stolen address, occupation, Social Security Number, bank account numbers, etc., they can file a tax return under someone else’s name and have the money sent straight to them.
This information is commonly found through phishing emails. Alternatively, some people may call taxpayers posing as financial advisers, banks, or other authorities who need the taxpayer’s Social Security Number. Others may hack into a taxpayer’s computer to gain the information they need to file a fraudulent tax return.
Taxpayers who have personal information on social media platforms are more susceptible to identity theft.
There are other types of income tax fraud that don’t involve identity theft, including:
- Failing to file taxes before they are due
- Failing to pay due taxes
- Failing to report all income
- Making false claims while filing taxes
Consult With a Lawyer If You Are Suspicious
Taxes are confusing, and it is not uncommon for taxpayers to be surprised or puzzled with the way that their tax season works out. However, cashing a refund that was made with fraudulent information, or lying while filing your taxes, can result in serious accusations and charges. Moreover, if someone filed a tax return under your name with fraudulent intentions, they could have lied throughout the process of filing your taxes. Do not suffer for their actions.
Colorado is seriously trying to cut down on the instances of taxpayer fraud, and law enforcement isn’t shy about tracking down offenders and holding them accountable through criminal charges. Unfortunately, for taxpayers who are afraid that they might be accused, members from the Department of Revenue have failed to disclose exactly what makes them suspicious of a taxpayer’s identity and when they decide to gather more information (and delay sending a refund).
If you are accused of tax fraud this season, you may face felony charges. Penalties are determined by the amount of money that was involved in the fraud, but typically include years behind bars and hundreds of thousands of dollars in fines.
Often, these types of crimes are dealt with in a federal court – stealing another person’s identity may cross state boundaries, and the crime involves a federal organization.
Anyone who has been arrested or charged with a fraud crime should get in touch with a Colorado criminal lawyer immediately to learn more about your options and possible defense strategies.
About the Author:
Denver-based criminal defense and DUI attorney Jacob E. Martinez is a knowledgeable and experienced litigator with a record of success providing innovative solutions to clients facing criminal charges of any severity. Mr. Martinez has been designated a Top 100 Trial Lawyer by the National Trial Lawyers and has been awarded both the Avvo Client’s Choice Award and Avvo Top Attorney designation, evidencing his reputation for his exemplary criminal and DUI defense work and high moral standards.