New York State today announced that the Department of Taxation and Finance had stopped 252,000 bogus refund claims in 2014, saving taxpayers $450 million. Already this year, the Department has stopped $331 million in fraudulent and erroneous refund claims—a trend projecting the total savings to taxpayers will exceed $500 million in 2015.
“By using cutting-edge fraud detection technologies, this administration is taking a stand against tax scammers seeking to benefit at the expense of hardworking New York taxpayers,” Governor Cuomo said. “These ongoing efforts will ensure that fraud is stopped in its tracks and that tax dollars are returned to those that are entitled to it.”
“Early this year when other states began to see significant increases in tax fraud, New York had already identified and stopped the schemes they were describing, and we shared our findings with those states,” said Acting Commissioner of Taxation and Finance Kenneth Adams. “By continuously studying and staying ahead of criminal activity, we will continue to save New York taxpayers hundreds of millions of dollars each year.”
The Department automatically reviews each return it receives using sophisticated analytic technology to stop questionable refund claims. The Fraud Analysis and Selection Team, a group of highly-trained staff monitoring tax returns for fraud, detects patterns in tax return data that indicate fraud schemes or identity theft. The findings are used not only to thwart refund fraud, but also to improve the data analytics so such schemes are automatically caught in the future.
Of the 10 million returns it processes annually, the Department of Taxation and Finance identifies hundreds of thousands of questionable returns due to errors or outright fraud. When criminal activity is suspected, the case is investigated and, where appropriate, referred to criminal prosecutors.
To report tax fraud, evasion or identity theft, call the NYS Tax Department at 518-457-0578 or visit the Department’s Tax Fraud Web page.