Doctors worry as IRS and Secret Service investigate theft of physicians' tax refunds

By Jim Finkle and Mark Hosenball

BOSTON/WASHINGTON (Reuters) - The U.S. Secret Service and Internal Revenue Service are investigating widespread reports that identity thieves are stealing the tax refunds of physicians, a U.S. senator said on Friday, as doctors fear a database containing their personal information has been breached.

Senator Jean Shaheen, a Democrat from New Hampshire, contacted the agencies this week after more than 100 physicians and other healthcare workers in her state became victims of tax fraud. The American Medical Association has received reports of tax fraud from state medical groups in Connecticut, Indiana, Maine, New Hampshire and Vermont.

Several million Americans have been victims of such scams over the past few years. Someone else files a tax return using their name and social security number and claims their tax refund, causing the legitimate tax return to be rejected when it is later filed.

Some physicians fear that they are at increased risk of identity theft after the government earlier this month released a report on Medicare that included names, provider numbers and other personal data, said an official with the American Medical Association, who was not authorized to publicly discuss the matter. The report did not include social security numbers.

"We are investigating tax return fraud," said Secret Service spokesman Ed Donovan, adding the probe involved doctors and other healthcare providers.

While the IRS would not comment on the investigation, the agency did implement new filters this year to catch bogus filings including data analytics tools for spotting suspicious tax refunds and screening for refunds filed from the same address.

The American Medical Association is also looking into the matter but has yet to determine whether fraudsters have targeted physicians or if doctors have been more vocal in reporting the crime, said the official.

(Reporting by Jim Finkle and Mark Hosenball; Editing by Ros Krasny and Lisa Shumaker)

[Image: "Worried Doctor," via Shutterstock]