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Tax fraud victims sue IRS for refund

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Published:   |   Updated: March 21, 2013 at 01:48 PM
LARGO -

As far as Jay Gordon is concerned, the Internal Revenue Service was the victim of someone who used Gordon's identity to commit tax fraud, and now Gordon and his wife are victims of the IRS.

"I know we're not the only ones," said Gordon, who described his predicament as "ridiculous, asinine, whatever you want to call it."

The Gordons have filed what they hope will be a class-action lawsuit against the U.S. government on behalf of a growing number of Florida residents who are having trouble getting their tax refunds because someone else filed tax returns to obtain fraudulent refunds in their names.

Law enforcement authorities in Tampa say tax refund fraud has exploded in the area, with postal inspectors intercepting what they estimate to be hundreds of millions of dollars of fraudulent tax refund checks.

Victims of identity theft have expressed near universal frustration with how the IRS has handled their cases. Lawmakers in Washington have introduced legislation and convened hearings to address the issue.

"We're basically not receiving what's ours because somebody else did something fraudulently," said Gordon, who teaches psychology at Tarpon Springs High School. "And I just don't understand why it's affecting us."

Gordon said he has "a high level of frustration" with the IRS. "All they try to do is just sort of placate you, and it's just ridiculous because you know it's going on with a lot of people."

* * * * *Gordon said he and his wife, Christine, first learned of the tax fraud when they received a letter from the IRS in March stating that the agency wanted to audit his tax return. There were two problems with that: Gordon and his wife always filed taxes jointly, and they hadn't even filed their taxes yet.

Finding out about the fraud was "a little bit surreal and very unnerving," Christine Gordon said.

When they called the IRS, after being put on interminable hold, they were told someone must have stolen their identity. Jay Gordon said they were told to file an identity theft affidavit, which they did. After that, they continued to get letters informing them of an audit.

He said he called the IRS and said, "Don't you know that we have filed as identity theft, and you need to back off."

The response, he said, was, "Well this department doesn't communicate with this department. Their bureaucracy is just, 'wow.' "

Finally, around June, the audit letters stopped.

"You're on hold, and then you're transferred from one ill-informed representative to another," added Christine, a licensed massage therapist.

The day after the Gordons attempted to file their electronic tax return, they were notified that their return was rejected.

No one would tell them how much of a refund the criminal obtained in his name. But the IRS has still failed to send the Gordons their $2,500 refund.

"I've called countless times," Jay Gordon said, "and we've got plenty of things coming up that we need to pay for."

He estimated he's called the IRS between 10 and 15 times, being put on hold each time for up to an hour. Frequently, he said, he's told someone will call him back. But no one ever does.

 

* * * * *

Contacted on Friday, the IRS released a written statement about the Gordons' lawsuit, saying they couldn't legally address the specifics of an individual case.

 

"We understand that this is a frustrating process for identity theft victims, and we share their frustrations," the statement said. "These are some of the most complex cases we handle. The IRS is firmly committed to working with people to take care of these issues as quickly as possible. We have been working hard to speed up resolution of refund fraud cases and help get these fixed promptly for taxpayers. We have put more people into this area to help resolve these cases as fast as we can."

The Gordons may have an uphill battle in court, as class-action lawsuits have been difficult to bring in recent years.

But their attorney, James A. Staack of Clearwater, said he thinks the prospects are good that a federal judge will give his approval to the class-action status of the suit.

"I think the class can be certified based on the existing rules and case law because everybody is experiencing the same problem," Staack said. "The IRS owes them a refund; they've applied for a refund … Everybody in the class we've defined has done that and the IRS has failed and refused to give them the money they're entitled to.

"It's not the IRS' money; it's not the government's money; it's the taxpayers' money as of Jan. 1. Our position is they're withholding the taxpayers' money."


esilvestrini@tampatrib.com (813) 259-7837

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