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Send your news to Caitlin Bailey
O'Neill at caitlinb@ctcpas.org.
L
ast tax season, the Connecticut
Department of Revenue Services
(DRS) stopped more than $30
million in fraudulent state income tax
refund claims. That's progress, but
each year the challenge grows. Indeed,
what was once a matter of invented
identities now requires tax agencies
and law enforcement to pierce sto-
len, real identity information. So too,
the big business of illegal tobacco tax
sales. It is all a growing, global illegal
enterprise with tentacles in organized
crime and terrorism.
More than ever, the DRS and CTCPA
need to be strong partners in protect-
ing taxpayers and fighting tax fraud. A
similar partnership is also underway at
the federal level among the IRS, state
tax agencies, tax processors, tax pre-
parers, and financial institutions.
At the DRS, we are stepping things up.
Our resources, once dispersed across
the agency, are being consolidated
and beefed up in dedicated anti-fraud
and criminal investigations units. We
are providing much more guidance
to taxpayers. We multiply screen re-
fund claims using DRS data and third-
party data. We do so in ways that are
also dynamic so that we can keep up
with the criminals who are constantly
adapting in order to beat detection.
We will no longer be as hasty with re-
funds at the risk of seeing taxpayer
money get to the thieves first. While
electronic filing and direct deposit re-
main highly secure, there will be many
more cases where suspicious filers will
be converted to paper checks because
it buys time for prevention. DRS will
also be sure to provide timely informa-
tion and assistance when taxpayers
suspect and report fraud or where we
suspect fraud.
On the tobacco tax front, the DRS
has already conducted several major
busts in just the past six months and
more are on the way. With penalties
low and the mark-up high, trafficking
in untaxed tobacco products is more
attractive than ever. In just one recent
enforcement action, we stopped an
estimated $60,000 a day in unstamped
product coming into Connecticut for
untaxed distribution and sale.
With respect to all tax fraud, we are
also working more closely with fed-
eral, state, and local law enforcement
while raising awareness among pros-
ecutors and judges that tax fraud is
serious crime.
There is so much that CTCPA and its
members, as well as all others involved
in tax preparation, can do as a first line
of defense for taxpayers. Help clients
understand how to protect their per-
sonal information by continuously up-
dating online security, verifying email
sources to avoid phishing, protecting
passwords and never divulging social
security numbers without clear assur-
ances of necessity and security. Help
them understand that phone calls or
emails from the IRS or DRS, however
threatening, are almost certainly not
legitimate. And when a tax preparer
or taxpayer suspects fraud, know that
the DRS fraud hotline (855-842-1441)
is there.
Professionally, CTCPA members can
also help police with the unfortunate
dark side of tax preparation. Taxpay-
ers need to know how to distinguish
between legitimate, qualified preparers
and those who are not. Taxpayers also
need to know how to avoid bad busi-
ness practices. This includes prepar-
ers who ask taxpayers to sign forms
in blank, have refunds paid to the pre-
parer or debit cards, offer commercial
promotions and tie-ins, or push high-
interest refund anticipation loans.
When it comes to fighting tax fraud, we
are all in this together.
Partners in Fighting Tax Fraud
By Connecticut Department of Revenue Services
Commissioner Kevin Sullivan
The
Commissioner's Column
John F. Ermer (above), a partner with
Beers, Hamerman, Cohen & Burg-
er, New Haven office, provided "An
Overview of the Impact of State Taxes
on Businesses" as part of a panel dis-
cussion sponsored by Barnum Finan-
cial Group, an office of MetLife and
a part of the MetLife Premier Client
Group, held at Gateway Community
College in New Haven.
Honors and Awards
Marcum was named Associate of the
Year by Associated Builders & Con-
tractors of Connecticut (CT ABC). In
addition, Joseph Natarelli, national
leader of Marcum's construction in-
dustry group and partner-in-charge
of the firm's New Haven office, was
sworn in as a member of the CT ABC
Board of Directors.
Ross Riskin, assistant professor of
accounting and finance at Albertus
Magnus College in New Haven, vice
president of Riskin & Riskin in Orange,
and managing member of Riskin
Advisory in Orange, was honored
with the AICPA Personal Financial
Planning Standing Ovation award.
Members in the Media
Michael K. Brooder, partner-in-
charge of Marcum's Hartford office,
wrote "Raising capital just got a little
easier" for the January 25 Hartford
Business Journal.
Professional Activities