Having your identity stolen can be scary and overwhelming. Identity theft occurs when someone uses your personal information such as your name, social security number (SSN) or other identifying information, without your permission, to commit fraud or other crimes.
In a recent issue of our TaxTips newsletter we explored key points to remember when dealing with Identity theft. Please click here for a PDF version of the TaxTips newsletter. You may request to be added to our mailing list to receive a free printed copy of TaxTips as it is published by simply contacting us at taxonwheels@att.net or 803 732-4288.
Additionally, the IRS also has some general recommendations for identify theft victims here.
Please feel free to contact Tax On Wheels, LLC at 803 732-4288 if you need assistance with this issue.
Many people are understandably concerned about their identify information having been stolen in the South Carolina Department of Revenue cyber attack. This is a serious risk for everyone concerned but it is not cause for panic.
The first thing every victim should do in this situation is take a deep breath. Protecting your identity is going to be a long distance race not a sprint. This situation will play out over the coming months or even years, not days. Based on the information released so far, there is not any action that you can take over the weekend that is going to resolve this issue for you. It is theoretically possible that those of us who have been exposed to this risk will spend the rest of our lives dealing with it. So whether or not you take action this weekend may have limited impact on the ultimate outcome. It is also, theoretically possible, that none of this will have any impact on your credit information at all. At this point we simply don’t have enough information to determine if we are going to be personally affected. I am recommending to my clients that we wait and see what information is released by the authorities on Monday and Tuesday of this week before we decide how to proceed.
I encourage everyone to bookmark this blog by clicking on the word “Blog” at the top of this page (not blog archives) and saving that page to your favorites or bookmarks. We will keep this page updated as information becomes available.
And, as always, please feel free to contact Tax On Wheels, LLC at 803 732-4288 if we may be of assistance to you.
The S.C. Department of Revenue announced on October 26, 2012 that approximately 3.6 million Social Security numbers and 387,000 credit and debit card numbers have been exposed in a cyber attack .
Anyone who has filed a South Carolina tax return since 1998 is urged to take the following steps:
Step 1. Call 1-866-578-5422 where you will enroll in a consumer protection service. The hours of operation are Monday – Friday 9:00 AM – 9:00 PM Eastern, Saturday and Sunday 11:00 AM – 8:00 PM Eastern.
Step 2. Then you will determine if you wish to have an online or US Mail alert mechanism.
Step 3. Next visit www.protectmyid.com/scdor. For the US Mail service, you will receive notifications via the US mail.
Experian’s ProtectMyID™ Alert is designed to detect, protect and resolve potential identity theft, and includes daily monitoring of all three credit bureaus. The alerts and daily monitoring services are provided for one year, and consumers will continue to have access to fraud resolution agents and services beyond the first year.
For complete information read the October 26, 2012 Press Release.
If you are trying to reach the protectmyid.com/scdor website to sign up for the free year of credit monitoring due to the South Carolina Department of Revenue security breach, please be advised that the state of South Carolina has changed vendors. If you wish to reach the new vendor click here.
We are providing information to our clients about the state of South Carolina hacking incident on our blog, please click here to visit our blog.
If you have filed a tax return with the South Carolina Department of Revenue since 1998 your personal information may have been compromised. Please read the official press release from the South Carolina Department of Revenue here.
Computer hackers were able to penetrate the computers of the SCDOR and gain access to sensitive taxpayer information including social security numbers and credit card information.
In order to protect yourself and help insure that you are not further victimized, you should take advantage of the available credit protection services that will be provided for one year free of charge.
Please be aware that no one is authorized to contact you directly and ask for your information. If someone does contact you it is most likely a scam. The protectmyid.com/scdor website and the toll free number are no longer the official contact points for data breach protection for residents of the State of South Carolina for addressing this issue.
Please feel free to contact Tax On Wheels, LLC at 803 732-4288 if you have additional questions and concerns or if we may be of assistance to you.
Hacker illegally obtained credit card and Social Security numbers
[Columbia, S.C.] The S.C. Department of Revenue today announced that approximately 3.6 million Social Security numbers and 387,000 credit and debit card numbers have been exposed in a cyber attack. Of the credit cards, the vast majority are protected by strong encryption deemed sufficient under the demanding credit card industry standards to protect the data and cardholders. Approximately 16,000 are unencrypted.
To protect taxpayers, the state will provide those affected with one year of credit monitoring and identity theft protection. Officials emphasized that no public funds were accessed or put at risk.
“On October 10, the S.C. Division of Information Technology informed the S.C. Department of Revenue of a potential cyber attack involving the personal information of taxpayers,” said DOR Director James Etter. “We worked with them throughout that day to determine what may have happened and what steps to take to address the situation. We also immediately began consultations with state and federal law enforcement agencies and briefed the governor’s office.”
Upon the recommendation of law enforcement officials, DOR contracted Mandiant, one of the world’s top information security companies, to assist in the investigation, help secure the system, install new equipment and software and institute tighter controls on access.
On October 16, investigators uncovered two attempts to probe the system in early September, and later learned that a previous attempt was made in late August. In mid-September, two other intrusions occurred, and to the best of the department’s knowledge, the hacker obtained data for the first time. No other intrusions have been uncovered at this time. On October 20, the vulnerability in the system was closed and, to the best of the department’s knowledge, secured.
“The number of records breached requires an unprecedented, large-scale response by the Department of Revenue, the State of South Carolina and all our citizens,” said Governor Nikki Haley. “We are taking immediate steps to protect the taxpayers of South Carolina, including providing one year of credit monitoring and identity protection to those affected.”
Anyone who has filed a South Carolina tax return since 1998 is urged to visit protectmyid.com/scdor or call 1- 866-578-5422 to determine if their information is affected. If so, the taxpayer can immediately enroll in one year of identity protection service provided by Experian.
Experian’s ProtectMyID™ Alert is designed to detect, protect and resolve potential identity theft, and includes daily monitoring of all three credit bureaus. The alerts and daily monitoring services are provided for one year, and consumers will continue to have access to fraud resolution agents and services beyond the first year.
In addition to the Experian service, state officials urged individuals to consider additional steps to protect their identity and financial information, including:
If credit card information is compromised, the best protection is to have the bank reissue the card. Anyone who has used a credit card in a transaction with the Department of Revenue should check bank accounts regularly to see if any unauthorized charges have occurred. If so, the cardholder should contact the credit card issuer immediately by calling the toll-free number located on the back of the card or on a monthly statement, tell them what you have seen, and ask them to cancel and reissue the card. Consumers should also change any credit card web account passwords immediately when unauthorized charges are detected.
“From the first moment we learned of this, our top priority has been to protect the taxpayers and the citizens of South Carolina, and every action we’ve taken has been consistent with that priority,” Etter said. “We have an obligation to protect the personal information entrusted to us, and we are redoubling our efforts to meet that obligation.”
If you have been paying attention the past few months you may have noticed that the state of South Carolina has been on a bit of a tear actually locking people up for various tax offenses. Just scroll back through the posts on this blog this summer and you will find multiple instances of average Janes & Joes suffering the indignity of having their names published in the local paper for being arrested for tax offenses and needing to come up with bail money to get released from the local hoosegow.
In the past the public was normally treated with an annual spectacle of some semi-prominent individual (frequently a lawyer) who got caught on the wrong side of the law and was dragged out into the public square and humiliated as a warning to the rest of us that this is what happens to tax cheats. A big deal was made of it for a day or two and then everything returned to normal until next year when another public flogging would occur.
This was the pattern until earlier this year. Suddenly the pace quickened. The number of announced arrests turned into a torrent. Rarely did a week go by this summer when at least one and frequently several individual arrests were announced. I posted many of them here in this blog, but the frequency was just too much to post them all. It used to be a big deal when one of these arrests were made. Suddenly, there were so many arrests announced that it was newsworthy only if somebody wasn’t arrested. Typically these arrests were your garden variety knuckleheads who faked a W-2, failed to file at all or claimed a ridiculously large deduction or some such nonsense.
That was the way it was until today when the South Carolina Department of Revenue announced an arrest for “Conspiracy” (see the immediately preceding post). This is new and it represents a major new approach to the state’s tax law enforcement efforts. As Barney Fife might say, “Andy, this is big.”
From my vantage point, the threat of “conspiracy to commit tax fraud” was something I oftentimes used to rebut tax clients who wanted me to help them cook their numbers so that a particular outcome would be guaranteed. The conversation would go something like this: “I need X amount of dollars in tax refunds this year, tell me what numbers I need to put on my return to make sure that happens.” I usually could get that kind of conversation shut down simply by explaining how that could constitute “conspiracy” and then asking why I should risk going to jail so you can have a bigger refund. But in all honesty I never really expected that I would ever see conspiracy cases made. A conspiracy case requires evidence that is usually quite difficult to produce. Well, apparently, the South Carolina Department of Revenue didn’t get the memo. I am not sure how the state plans to prove conspiracy in court but they apparently feel confident enough of their evidence to actually make an arrest.
Those of us who try to play this game by the rules welcome the stepped up enforcement by any taxing authority, whether it be state or federal. But as citizens we all have a stake in making sure the authorities provide fairness and due process to those charged with tax crimes. It will be interesting to see how this and any similar cases play out in court. In the mean time, as always, I recommend that you get those back taxes caught up quickly. If we can help don’t hesitate to give Tax On Wheels, LLC a call at 803 732-4288.
Columbia, SC (October 17, 2012) — SC Department of Revenue investigators today arrested a man from Hartsville for state tax charges. Cecil Gainey was charged at the Darlington County Detention Center with three counts of income tax evasion and one count of conspiracy.
During tax years 2006, 2007 and 2008, Gainey reported fraudulent information on his income tax returns by inflating mileage figures to increase deductions. For these periods, Gainey received state income tax refunds totaling $4,361 to which he was not entitled.
The investigation further revealed that Gainey conspired to commit tax evasion along with another individual by discussing various mileage figures to use on Gainey’s 2008 income tax return; the individuals decided to report figures that they knew were fraudulent.
If convicted of the charges, Cecil Gainey, 50, could face up to $35,000 in fines and/or 20 years in prison. Gainey is currently awaiting a bond hearing at the Detention Center.
Columbia, SC — Deborah C. Westbrook, 61, was arrested today by South Carolina Department of Revenue investigators on four counts of income tax evasion.
According to the investigation, Westbrook earned income of $167,817 during 2007 through 2010 and failed to file SC income tax returns for the duration of the period. Also during that time, Westbrook filed fraudulent W4 withholding forms with her employer to avoid having taxes withheld from her wages. Since state income taxes were not withheld from Westbrook’s wages, she avoided payment of $6,247 in state income taxes.
Westbrook is facing up to 20 years in prison and/or fines of up to $40,000 if convicted of the charges.
Westbrook is being held at the Lexington County Detention Center awaiting a bond hearing. The Lexington County Sheriff’s Office assisted with the arrest.
The investigation into a Charleston income tax refund scam continues as another individual was arrested this morning by South Carolina Department of Revenue (SCDOR) officials.
O’Neill Pinckney of Mt. Pleasant was taken to the Charleston County Detention Center and charged with one count of assisting in the preparation of a false return and one count of forgery; he is currently awaiting a bond hearing.
In 2008, Pinckney filed income taxes with a fraudulent W2 form from an establishment where he was not employed. Pinckney therefore received overstated federal and state tax refunds of $4,593 and $706, respectively. Pinckney’s tax liability for 2008 totals $5,299.
If convicted of the charges, Pinckney could face fines up to $500 and/or 15 years in prison.
South Carolina Department of Revenue (SCDOR) investigators arrested a woman from Goose Creek over the weekend for one count of assisting in the preparation of a false return and one count of forgery.
Noella Lockwood, 34, could face penalties of up to $500 in fines and/or 15 years in prison if convicted of the felony charges, according to officials.
Upon review of Lockwood’s 2009 income tax returns, SCDOR investigators determined that Lockwood filed her tax returns via a tax preparer and used a fraudulent W2 form from an employer who she did not work for during that time. By submission of the fraudulent W2 form, Lockwood received an overstated fraudulent SC income tax refund of $717 to which she was not entitled.