According to USA Today, crime really does pay — at least for prisoners in Florida, Georgia and California who scammed the IRS out of millions of taxpayer dollars.
[P]risoners in the three states received nearly $19 million in IRS refunds during 2009 after filing false or fraudulent tax returns, according to an IRS report to Congress that was included in a federal audit released in January.
The haul was part of $39.1 million in undeserved federal tax refunds the IRS issued to jail and prison inmates nationwide for phantom jobs on phony returns, the data shows. That’s nearly triple the $13.4 million annual in tax refunds the IRS reported it issued to prison scammers just five years earlier.
“If the IRS does not take action, the problem will only worsen and more taxpayer dollars will be lost,” said J. Russell George, the Treasury Department inspector general for tax administration, whose office conducted the audit.
George added that “prisoners continue to find new ways to exploit weaknesses in the system in order to receive refunds to which they are not entitled.”
The IRS “takes refund fraud seriously,” and has instituted programs that stop “the vast majority of refunds from fraudulently going to inmates,” said Michelle Eldridge, the agency’s chief national spokeswoman, who added “we continue to increase our efforts.”
But so do inmates seeking refunds for jobs they never held, and taxes that weren’t withheld.
Unfortunately, the IRS could not determine how much of the fraudulent funds had been recovered since the “recapture” process can take several years. Even worse, the actual amount stolen could be even higher since the IRS does not always perform fraud screenings on tax returns filed by prisoners.
The inmates do the same thing with Pell Grants – they sign up for classes that will be dropped and then the Pell Grant money is deposited into their commissary accounts rather than be returned to the government for other students. Please report on this too!
IRS should have officers located at each of the prisons for the inmates taxes. or have them all collected and done at one office grouped under the Prison they are coming from.(tax forms could even be color coded for no mishaps) Scrutiny and checking measures would be maintained. The excess $s would be split between the tax preparers and the government. Its a simple solution. So it makes me wonder if the $s are being siphoned off for other purposes, especially since its been going on for so, so many years. It looks like everything the government touches is hemorrhaging money! Maybe if we get out our buckets, we could capture enough, a little here a little there, and start paying down the national debt. Begin by auditing the Federal government with real time accounting. Not by government accounting standards, that take out certain area budgets and account on a curve.(theirs) Thats an old “Carney trick”; now you see it now you don’t, kinda like the most recent bailout by taxpayers, to non FDIC insured big mortgage giants and insurance companies. Question: with nearly all the TARP money paid back to the government,
Where is the money?