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Crime & Courts

Tampa lawyer saw tax fraud fallout firsthand

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Published:   |   Updated: March 18, 2013 at 08:59 PM
TAMPA -

Lawyer William Stainton knows a little bit about fighting with the IRS to get a tax refund.

Last year, he and his wife, Joanne, learned their tax return — and a refund of more than $9,000 — had been blocked because someone else had filed in Joanne's name.

After months of frustrating dealings with the IRS, the Staintons got their refund in November with a little something extra: $68 in interest to compensate for the delay — and a form so they could pay taxes on the interest.

"The IRS is taking the position that they're not going to pay you timely, but we'll pay you interest, but we'll tax you on the interest," Stainton said. "That seems, to me, silly."

Now Stainton is representing a client who is still waiting for his 2011 refund.

"I didn't have to pay for Will's education," said the client, James W. Townsend. "He's already been through it."

Stainton filed a lawsuit on Townsend's behalf last week, asking a federal judge to order the IRS to pay Townsend and his wife their $23,000 tax refund for 2011. Like Stainton, the Townsends were victims of a thief who stole James Townsend's identity and filed a tax return in their name to obtain a fraudulent refund.

Stainton said he and his wife were able to get their refund with help from the Taxpayer Advocate's Office, which provided assistance because they have a daughter with special needs.

But James and Janice Townsend don't have that option because they don't have any special medical needs or other reason sufficient to get the advocate's office involved. So they're still waiting.

Townsend, who owns Townsend Constructors, said it's been painful dealing with the IRS.

When he first called, he said, an IRS employee questioned whether he was really who he said he was. Townsend told the employee he had five years' worth of tax returns in front of him and she could ask him any question she wanted. The IRS employee also told him they were overworked and too busy, which he found "more than frustrating," Townsend said.

After calling the agency maybe 20 times, "I just gave up and turned it over to Will."

Townsend said he has no idea how someone stole his personal information to file a tax return, and he hasn't gotten any answers from the IRS.

Stainton said all the IRS will tell him is that the matter is under investigation.

Stainton said his own experience "certainly makes me more sympathetic for my client's position. I have a little bit of experience dealing with these situations, unfortunately."

Last year, Stainton was fighting the IRS for a copy of the return that was filed fraudulently in his wife's name.

He said the IRS refused to give it to him, saying because officials were "worried about people who get that return, if they find out who did it, they might go to their house or confront them or take some action."

The IRS held to that position even as it issued a legal opinion that identity theft victims had the right to that information unless giving that information to the victims would "impair tax administration."

That opinion was issued as part of a program in which identity theft victims could sign waivers to allow law enforcement access to the returns filed fraudulently in their names.

Stainton hoped to use the information on the fraudulent form to file a lawsuit against the identity thief.

But on this point he surrendered. "I got so many things going on," he said. "I don't have time to go through their rigmarole since they throw up so many roadblocks."

By the same token, Stainton said he's hoping to put an end to the delays for Townsend.

"The goal for my client is not to get in a long, drawn-out dispute with the IRS over this specific matter," he said. "It's to get the refund that he's rightfully owed."


esilvestrini@tampatrib.com (313-259-7837 Twitter: @ElaineTBO
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