TAMPA, Fla. - It's being described as an out-of-control epidemic. Tampa is ground zero. And it's costing you, the taxpayer, millions -- if not billions -- of dollars.
An ABC Action News I-Team investigation into income tax fraud has discovered outrageous cases that are not being prosecuted, leaving a trail of victims and frustrated local and federal investigators.
Most of the time, Tampa police officer Eddie Perez can tell just by the car. "Here we go," Perez said recently as the I-Team rode with him on patrol. "Come to daddy."
And most of the time, he's right. Whether it's the brand new Dodge Charger with colorful rims, or the late model Infinity coupe we came across less than 30 seconds after pulling out of the District 3 police station in East Tampa.
"You need to start rolling," Perez said as he called for backup. "He's not stopping."
High-end cars in a low-income part of town. If there's probable cause to pull them over -- like no seat belts, in this case -- Perez does.
“Turns out the driver, Melvin Fowler, doesn't have a driver’s license. But he did have more than $1,000 in cash, and evidence, the arrest report would state, "of personal information commonly used for tax fraud."
East Tampa has been identified by police as ground zero when it comes to the buying and selling of stolen identification and the filing of fraudulent income tax returns.
"What do you have there?" we asked Perez as he sorted through paperwork during a traffic stop.
"Right now, we have a bunch of names, dates of birth, and Social Security numbers," Perez responds.
That included the Social Security number of 77-year-old, wheelchair-bound Blossom Goldman, whom we discovered living at a Dunedin nursing home.
"It gets me angry," Goldman said. "I'm on a limited income. And there's nothing I can do about it."
Goldman says she has no idea whether her personal information has been improperly used.
Tampa police say there is little they can do about it. Melvin Fowler was charged with driving without a license --- and nothing else.
The I-Team has found the explosion in these cases is causing friction between local law enforcement and the Internal Revenue Service.
At the core, Tampa Police Chief Jane Castor says, are IRS privacy laws that shut out local police.
"They are unable to share information with local law enforcement," Castor said. "So, in essence, they are absent in these investigations and it's put on the step of local law enforcement. And this is a federal crime."
But other federal agencies can't get the IRS to cooperate, either.
"All the heads of the agencies here locally are scratching their heads, trying to come up with an idea of what might stem the flow," said John Joyce, agent-in-charge of the Secret Service's Tampa office. " I don't know what the IRS is specifically doing."
The Secret Service not only protects the president but also investigates financial crimes. Joyce said he believes he has a solution.
"It is becoming rampant, if not epidemic, and what I'd like to see is part of the solution is to slow down that efficiency of the electronic filing system," Joyce told the I-Team.
Joyce says that would give the IRS a chance to check and stop what's happening right now --- hundreds of fraudulent refunds going to the same address.
The I-Team was there when 23-year-old Nakishia Riley was arrested on 48 counts of dealing in stolen property and resisting arrest.
"Look at all these Socials," Perez said to another officer. " This is exactly what we've been looking for."
But Riley was not charged in connection with the more than $1,000 in cash in her possession. Nor was she charged when police discovered hundreds of names and Social Security numbers --- and bank account information --- inside a notebook in her car.
"Those are people's lives," we told Riley.
"OK, not mine," she responded.
Riley wouldn't talk to us at length. But she later gave a statement to detectives. The woman said she had just started filing fraudulent tax returns and paid $10 for each name.
Police say the names are stolen from nursing homes, doctor's offices and hospitals.
So, if the IRS is the only agency that can investigate tax fraud and scrutinize suspicious returns, why isn't the agency acting faster?
The IRS wouldn't talk to us. But retired IRS agent Norm Meadows did.
"It might end the problem all together, but the pressure is there from Congress and the public," Meadows said. " It's part of the IRS's culture just to issue those refunds as quickly as they can. After all, it's the American taxpayer's money."
Meadows says he has seen the IRS change procedures to meet new challenges. Clearly, it hasn't yet.
We found a steady flow of ID theft victims filing reports at District 3 police station. "Somebody else filed under my name," a victim, who wouldn't identify herself, told us.
Two members of Congress, Democrat Kathy Castor of Tampa and Republican Gus Bilirakis of Palm Harbor, are co-sponsoring a bill that would allow victims to sign a waiver allowing local authorities access to their federal returns to investigate tax fraud.
Of course, that wouldn't stop the filing of fraudulent tax returns.
If you become a victim, however, authorities recommend that you:
1) Call local police;
2) File an identity theft affidavit, IRS Form 14039, with the federal government; and
3) Call the IRS hotline at 1-800-908-4490.
Do you have information about government waste, fraud or abuse? A tip about business misconduct that needs to be investigated? Email us at firstname.lastname@example.org
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