Arizona Department of Revenue stops $74 million of tax return fraud

Posted: Updated:
By Mike Gertzman By Mike Gertzman

PHOENIX -- The Arizona Department of Revenue stopped more than $74 million of fraudulent return money from being sent out this past fiscal year, according to a press release.

This variety of tax fraud involves people filing false income tax return claims by using stolen or fictitious information.

The amount prevented more than doubles the amount of fraudulent money stopped last year. Last year, $32 million in tax return fraud was prevented, meaning this year saw a jump of $42 million. This increase is a result of stronger enforcement in addition to more crime, according to the Department of Revenue.

The department has improved its computer programs and assigned more trained auditors and investigators to these kinds of cases. However, there's also a belief that the advent of electronic filing has led to an increase in crime.

David Raber, the department's director, said that computer-based filling has created a nationwide problem with tax return fraud. Raber said the IRS paid out nearly $4 billion in fraudulent tax returns in 2013 and saw a 66% increase in identity theft in that same year.

"This type of tax fraud amounts to blatantly stealing hard-earned taxpayer money from the state's general fund," Raber said in a statement. "We will continue to do everything possible to combat this type of crime."

Just five years ago, the Department of Revenue only stopped $2 million of fraudulent returns. While recent increases in fraud stopped can be credited to improved prevention, Anthony Forschino, the department's assistant director, said that stopping 37 times the fraud in half of a decade is a sign of rapid growth for this kind of crime.