Tax Relief: Prison Inmates Stealing Tax Money
Posted by LWM Team on Wed, May 05, 2010
People go to jail for many different reasons. The objective of a jail sentence is to reprimand and provide an opportunity for the offender to change his or her ways. The tax payer is responsible for providing the finances required to run prisons and manage programs for the benefit of serving offenders. However, it has been alleged tax payers' money is paying for much more.
It is certain society does not expect a jail to be a location where more crimes are hatched. It seems this is going on all around the US. Inmates serving time commit tax relief fraud by simply filling out a 4852 form that is meant to notify of wages if your W-2 form is misplaced. Once forms and tax returns go through the system, inmates get refunds that are false. False refunds are mailed either to family, friends or straight to the prison address in question. These refunds go to participating inmates and a share is held by ringleaders.
A special inquiry involving a jail in Key West, Florida has been undertaken by CNN. It was found inmates tried to steal in excess of $1 million by means of tax fraud. This is done by the use of false businesses, social security numbers and tax forms in order to get refund checks.
The IRS has provided inmates with cheat sheets and instructions on how to complete genuine forms so refunds are mainly under $5,000.
The IRS has known about this type of tax fraud for years. They identified false refunds from inmates as a priority five years previously. The IRS observed there were 118,000 fake tax returns filed by inmates i.e. an enormous 15 percent or $14 million dollars in tax claims that were entirely false. Uncle Sam did manage to prevent an extra $53 million.
The ever changing population of inmates coupled with the IRS' stand to give refunds and audit afterwards, presents problems. The later audit is because honest tax payers want their refunds in a matter of days. The IRS is not disclosing their plan to curb false claims from jail inmates but they are aware of who is doing it.