Last year, Idaho saw a significant spike in tax fraud attempts. As the deadline for this year’s tax season approaches, the State Tax Commission says 2023 may have been an outlier.
Between February and March of 2023, the Commission reported a large increase in the number and the total value of fraudulent income tax returns it received.
“Last year, we stopped $30.1 million in income tax refunds from going to fraudsters,” spokesperson Renee Eymann said, an increase in fraudulent claims of more than 600% from the previous year.
“We do see a lot of fraud,” she said, adding this is why all returns submitted to the state go through a fraud detection review before any refund is issued.
This year’s tax season fraud numbers seem to be back to what they were prior to 2023.
“As of March of this year, we've stopped a little over $1 million in fraud from going out the door,” Eymann said. “Last year at this time, we were already up to 29 million.”
In a written statement, Tax Audit Manager Rebecca Danley said she did not know what caused the spike.
“The trends were in falsified W-2s and 1099s,” she said. “The falsified W-2s and 1099s showed Idaho income tax withholding that didn’t belong to the fraudster.”
“A lot of it is identity theft. Somebody has stolen your Social Security number and is filing a return in your name so they can get the refund,” Eymann said.
Last year, the Commission did not forward these false claims to authorities and there is currently no investigation on what might’ve caused the high number of fraud.
