Tax Season Also Time for Fraud

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It's the season for taxes at the Mississippi Department of Revenue. And as returns are sorted, so are cases of fraud.

"We do see a lot of things that come through that are just completely and totally wrong," said Kathy Waterbury of the state Department of Revenue.

Waterbury says last year alone, the department stopped more than $10 million in fraudulent claims from being sent out in the form of refund checks.

"If we knew it was a fraudulent claim, it's not going out of here," Waterbury said.

As a consistent problem, the department is trying to stay one step ahead in making sure fictional claims don't slip through the cracks.

"If your expenses are greater than your income, that might be a red flag for somebody to look at something," said Waterbury.

Because of fraud, some legitimate returns and refunds get held up. A big problem in fraud, Waterbury says, is fly-by-night tax services, promising a higher refund, complete with tax preparers who have no experience.

"People entrust them with their sensitive financial information, including their Social Security number," said Waterbury.

Criminal investigators are working to identify those tax services, but Waterbury says there just aren't enough investigators to go after all of them. Even if the tax preparer submits a fraudulent return, it's the individual who will be responsible.

"You're the one who signs that return and you'd be the one paying the back taxes plus interest and any penalties that may be attached to that," Waterbury said.

To avoid being on the financial hook with the Department of Revenue, Waterbury says make sure your tax preparer is qualified and will be there after April.

The department has already issued more than 230,000 refunds to taxpayers. As the April deadline get closer, the longer it'll take to issue any refunds.