Ex-IRS Worker Admits to Stealing $1.7 Million in Fake Refunds | AccountingWEB

Ex-IRS Worker Admits to Stealing $1.7 Million in Fake Refunds

It’s bad enough that taxpayers have to contend with higher federal income tax rates and stiff penalties for underpayments. Apparently, there’s also a danger that an IRS employee will abscond with some of the tax money under false pretenses.

On January  21, Monica Nanette Hernandez, a former IRS data clerk, pleaded guilty to one count of aggravated identity theft for stealing the identities of taxpayers and using the fake IDs to claim more than $1.7 million in tax refunds. She also was charged with pilfering more than $175,000 through fraudulent tax returns for herself.

Prosecutors say that Hernandez, forty-one, who was employed by the IRS on a part-time basis, stole sixty-eight tax returns from the IRS Service Center in Fresno, California, in April 2010 and used the information to claim refunds based on excessive federal tax withholdings. In addition, she filed three fraudulent returns for herself using the same basic gambit.

In addition to the one count of aggravated identity theft, Hernandez on Tuesday pleaded guilty to one count of filing false income tax returns and one count of wire fraud.

Despite reduced resources due to budget cutbacks, the IRS has vowed to ramp up efforts to uncover identity theft and bring offenders to justice.

“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority, especially in those situations where individuals with positions of trust commit fraud by taking taxpayer information to file fraudulent tax returns in the name of the stolen identity to obtain a larger tax refund,” IRS Special Agent José M. Martinez said in a prepared statement. “This resulted in significant harm to those taxpayers whose identities were stolen, as well as a monetary loss against the US Treasury.”

Hernandez faces up to twenty years in prison and a $250,000 fine. She will be sentenced on April 14, one day before the filing deadline for 2013 returns.

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