Roughly 400 university employees report tax fraud in Iowa

National tax day is upon us, and the number of employees at Iowa's public universities reporting some form of tax fraud has reached about 400.

That total includes a possible 337 University of Iowa employees who discovered some form of tax fraud after trying to file their returns and finding 'a criminal beat them to it,” according to UI officials. Iowa State University has received reports of tax fraud concerns from more than 60 employees.

University of Northern Iowa officials did not respond this week to The Gazette's questions about fraud reports. But the university previously reported none this year after dealing with hundreds last year.

UI and ISU officials have said they don't believe internal breaches are behind the fraudulent activity affecting employees, but they're continuing to look for similarities in affected employees.

'We have created a tax fraud investigation task force and are working with the IRS and the Iowa Department of Revenue to investigate these reports,” UI spokeswoman Jeneane Beck said in an email, adding, 'we still are not finding any evidence of a massive breach of any University of Iowa system.”

Affected UI employees have been victimized at the federal or state level or both. And some of the fraud has involved out-of-state filings, according to Beck. In some cases, former UI employees are reporting suspicious activity.

And, Beck said, quite a few cases have involved joint returns where only one person is a UI employee. In those cases, she said, the UI isn't clear whether the employee or spouse has had his or her identity stolen.

'So far, we've haven't worried too much about these issues, as we want to make sure that we capture everything for the investigation,” Beck said. 'But this approach will inflate our counts.”

Some of the fraud at the state level has been self-reported, while some has been reported by the Iowa Department of Revenue and hasn't been verified by the taxpayer, according to Beck.

'The number of employees isn't as straightforward as some might think,” she said.

Wednesday - April 15 - marks the deadline to file income taxes with the Internal Revenue Service. Media outlets report tax fraud has been widespread this season. The Fiscal Times last month reported expectations that hundreds of thousands, if not millions, of Americans will become victims of online tax fraud.

The Chicago Tribune on Tuesday reported identity theft statistics continue to climb, with about 2.9 million incidents of tax-related identity theft occurring in 2013, according to a recent report from the U.S. Treasury Inspector General for Tax Administration. That is up from nearly 1.8 million in 2012.

Tax-related identity theft most often occurs when a criminal tries to intercept a tax refund by forging a tax return using a stolen Social Security number, according to the IRS.

'The number of fraudulent tax returns is on the rise nationally, as criminals use stolen names and Social Security numbers to forge W2 information on electronic filed tax returns,” according to a warning issued to the UI campus in March. 'Most people do not realize there is a problem until they file their tax return and discover that a criminal beat them to it.”

States are reporting increases of 50 to 3,700 percent in fraudulent tax returns this year, according to UI officials.

But tracing the source of the fraud can be a challenge, they said, with several high-profile security incidents of late involving national corporations like Target, Sony Corp., and Home Depot.

During last year's tax season, 270 UNI employees reported tax fraud after a possible information breach at the institution. More than 1,600 employees took advantage of free credit monitoring, and state and federal authorities launched an investigation that continues.

UNI to date has spent $126,261 responding to the potential breach.