D.C. physicians swept up in tax ID theft scam


(Andrew Harrer/Bloomberg)

The tax day deadline passed more than a week ago, but for some Washington physicians, the headache may have just begun.

A handful of physicians who practice in the District have reported being hit by an ID theft tax scam in recent weeks after being alerted to the scam by the Medical Society of the District of Columbia (MSDC). MSDC executive vice president K. Edward Shanbacker, said that, over the past three days, he's heard from more than two dozen of the group's members who say they were affected by the scam.

The medical association is among several state and local professional medical groups across the nation that have cautioned their members about an increase in tax fraud this year. Scammers appear to have obtained the Social Security numbers and other personal identifying information of physicians, nurse practitioners and other health care providers to use in fraudulent tax filings in order to steal their victims' tax refunds, the groups say.

On Wednesday, Sen. Jeanne Shaheen (D-N.H.) called on the Secret Service and the Internal Revenue Service to look into the matter after more than 100 physicians and health care providers in New Hampshire reported being targeted by the scheme.

Krebs on Security's Brian Krebs reported that medical associations in Arizona, Connecticut, Indiana, Maine, Michigan, North Carolina and Vermont say that their members are also increasingly reporting cases of fraud. According to Krebs, a national professional organization may have been hit, but it is still unclear where the data used in these attacks originated.

Shanbacker said some of the D.C. physicians learned of the scam when they were told they couldn't file their taxes because they had already been filed. He said others received notice from the IRS  that there was a discrepancy on their tax forms before they had even filed them.

The IRS said in a statement that it has focused significant resources on screening out fraudulent returns. "The IRS has more than 3,000 employees working on identity theft cases," the statement said. "We have trained more than 35,000 employees who work with taxpayers to recognize and provide assistance when identity theft occurs. We’re focused on preventing, detecting and resolving identity theft cases as soon as possible."

Victims of this type of scam are often assigned an additional PIN number to verify their identity when filing tax returns. For the 2013 tax season, the IRS says it anticipates assigning more than 1.2 million such these PINs.

According to the Federal Trade Commission, tax fraud identity theft is making up an increasing share of all ID fraud. In 2010, the practice accounted for 15 percent of all ID theft claims; in 2012, it was as high as 43 percent.

Shanbacker said that the organization does not know the origin of the data breached, nor how long ago the information may have been released. There is no indication that scammers have used this information to access patient records or any data connected to physicians' professional lives, he said.

It is also unclear whether medical professionals are being targeted at higher rates than the general population. A number of data breaches reported in recent months have increased the risk of ID theft for millions of Americans.

Shanbacker said that his organization and others are working with the Secret Service to help identity the source of the breach. Secret Service spokesman George Ogilvie confirmed that the agency is assisting in the investigation but declined further comment.

Hayley Tsukayama covers consumer technology for The Washington Post.
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