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Frustrated Largo victim of ID theft sues IRS for withholding refund

Jay and Christine Gordon knew they had a serious problem when the IRS notified them in March that their 2010 tax return was being audited.

The Largo couple hadn't yet filed their joint 2010 return.

What followed were months of frustration and bewilderment as the Gordons battled the behemoth agency after they learned that somebody had filed a fraudulent 2010 tax return in Jay Gordon's name.

The person who filed the bad return, using Jay Gordon's Social Security number, apparently got a tax refund. But now the Gordons can't get their own.

The Gordons filed suit earlier this week in Tampa federal court asking a judge to order the IRS to pay their legitimate $2,513 tax refund the agency is withholding. (The couple filed their return a month after IRS notification of the audit.)

To make matters worse, the suit said the IRS did end up auditing the fraudulent return. The result was an IRS demand to the Gordons that they repay $886 after the IRS disqualified a credit on the fraudulent return.

Jay Gordon said in an interview Friday that hours and hours of calls to the IRS have proved fruitless, leaving no choice but to file suit in U.S. District Court.

"I've probably had a full day of my life sucked from me that I will never get back," said Gordon, 36, a psychology and social studies teacher at Tarpon Springs High School. "I've called them probably at least 12 to 15 times total. … I get shuffled from department to department, person to person.

"I've told them, 'Imagine if I did my job like you guys. I'd be fired.' "

The IRS said in a statement it could not comment specifically on the Gordons' case. But the statement said the agency is "working hard" to clear up refund fraud cases as quickly as possible, including adding personnel to resolve them.

"We understand that this is a frustrating process for identity theft victims, and we share their frustrations."

Tax-related identity theft cases have more than doubled since 2008 with 582,000 taxpayers affected in 2011, according to Nov. 4 congressional testimony by J. Russell George, the Treasury inspector general for tax administration.

Through the middle of September, the IRS reported it had identified 1.6 million fraudulent tax returns in 2011 seeking more than $12 billion in refunds. The IRS caught most of those, though it did mistakenly pay $500 million in bad refunds.

"Our preliminary observations are that the IRS is not effectively providing assistance to victims of identity theft and its processes are not adequate to communicate identity-theft procedures to taxpayers," George testified. "This results in increased burden for the victims of identity theft."

He added, "The essential trust and reliability of the nation's tax administration system is eroded" when innocent taxpayers are harmed by fraudulent returns.

Some critics say Congress has pressured the IRS to pay refunds more quickly, especially by electronic means, leaving the agency with less time to scrutinize returns.

Gordon said no other part of his life has been impacted by identity theft and nobody has taken out credit cards in his name. He isn't sure how somebody got his Social Security number.

The couple's attorney said he was disappointed that with so much identity theft in the nation the IRS has not yet figured out how to efficiently deal with such cases.

"I find it disturbing the IRS just puts its head in the sand and tries to avoid facing the issue," said Clearwater attorney James Staack, who represents the Gordons. "Our view is that the IRS was defrauded by a criminal who should be prosecuted. But the IRS makes it the Gordons' problem. They didn't do anything wrong."

Gordon said when he calls the IRS, he is often promised a return call in two to three days by someone who can help him. But the phone never rings.

He said he tries not to lose his temper, however great the temptation. Gordon said he also has promptly followed IRS instructions. He filed a report with the Pinellas County Sheriff's Office and the Federal Trade Commission.

"I know the IRS has a lot to sort through," Gordon said. "But it really shouldn't affect people's lives like this."

Reach William R. Levesque at or (813) 226-3432.

Frustrated Largo victim of ID theft sues IRS for withholding refund 12/30/11 [Last modified: Friday, December 30, 2011 9:37pm]
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