Paul L. Caron
Dean




Thursday, December 2, 2010

TIGTA: IRS Paid $130m in Fraudulent Tax Refunds to 50,000 Prisoners

TIGTA The Treasury Inspector General for Tax Administration today released Expanded Access to Wage and Withholding Information Can Improve Identification of Fraudulent Tax Returns (2010-40-129):

TIGTA’s analysis found that the majority of tax returns the IRS identifies as being filed by prisoners are not being screened to assess their fraud potential. The review found that 253,929 (88 percent) of the 287,918 returns filed by prisoners as of March 24, 2010 were not selected for screening. Of those, 48,887 who claimed refunds totaling more than $130 million had no wage information reported to the IRS by employers. ... TIGTA’s findings regarding prisoners are similar to its findings in a September 28, 2005 audit, The IRS Needs to Do More to Stop the Millions of Dollars in Fraudulent Refunds Paid to Prisoners (2005-10-164).

https://taxprof.typepad.com/taxprof_blog/2010/12/tigta-irs-paid-130m-in-fraudulent-tax-refunds-to-50000-prisoners.html

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Comments

Ledo, I don't know much about tax law but unless the prisoners were paying taxes on a business, how do you figure they can write off their attorney's fees? I wasn't aware that you could deduct the cost of defending yourself on a criminal charge.

Posted by: sf | Dec 14, 2010 4:27:47 PM

If a person who is working goes to jail during that work year they still have to file taxes. If they hired a lawyer, they could write him off and get a hefty return while in prison. What is fraudulent about that? If the returns aren't audited, how can one make the statement they are fradulent? And Caron, either grow the beard or buy a razor.

Posted by: Ledo | Dec 5, 2010 5:59:55 PM

Wasn't directed at you Ellen, it was directed at Mark who feels that prisoners should get income credits. Should have been more direct, sorry!

Posted by: Jen | Dec 4, 2010 2:45:51 AM

Jen - calibrate your sarcasm detector. I was simply channeling the current administration, not stating my beliefs.

Posted by: Ellen | Dec 3, 2010 8:31:38 AM

"One could figure, according to income, that many of these people are owed an earned income credit."

By virtue of their willingness to cheat on taxes, they ought to have cabinet positions! At the very least we could look in to appointing a Czar of License Plate Manufacturing and Steroid Abuse.

Posted by: Ben | Dec 3, 2010 6:59:02 AM

Uhmm, prisoners are in prison for committing crimes. They aren't owed anything as they are paying a debt to society. If anything, any wages they are paid should be used for restitution for their crimes.

Posted by: Jen | Dec 3, 2010 6:48:06 AM

But - but - those prisoners are OPPRESSED! They DESERVE the money!

Posted by: Ellen | Dec 3, 2010 6:43:09 AM

And free health care!!!

Posted by: Bogo | Dec 3, 2010 5:47:36 AM

But really, when you consider the wages prisoners receive, they can't be earning too much annually. One could figure, according to income, that many of these people are owed an earned income credit.

Posted by: Mark | Dec 2, 2010 12:56:18 PM

But the IRS does a better job of screening than most state and local tax agencies.

Posted by: Bob | Dec 2, 2010 9:20:47 AM

But, the administration can claim that the $130 million went into the economy to create or save 200 jobs.

Posted by: Woody | Dec 2, 2010 9:12:31 AM