The IRS likes to tout that it did a better job of identifying fraudulent tax returns among all those who filed during the 2010 tax season, claiming it discovered nearly 250,000 cheaters and prevented $1.48 billion from being wrongly paid out. But for some reason the IRS didn’t spend a lot of time checking the returns of prisoners—those who have already demonstrated a penchant for breaking the law and who have a lot of time on their hands.

 

A new report from the Treasury Inspector General for Tax Administration found that 88% of filings made by inmates as of March 24 had not been screened by IRS examiners. Of the 48,887 who claimed refunds totaling more than $130 million, none of them had any wage information to report.

 

 

“There is a major problem with returns being filed fraudulently by people who are incarcerated,” Tax Inspector General J. Russell George told The Washington Post. “What makes this even more problematic is that we identified this as a problem more than five years ago. The problem not only persists, it’s gotten even worse.”

-Noel Brinkerhoff

 

IRS Needs to Better Screen Prisoner Tax Returns (Accounting Today)

Inmates Get Fraudulent Tax Refunds Behind Bars, Report Says (by Ed O'Keefe, Washington Post)

Fraudulent Tax Returns (Treasury Inspector General for Tax Administration)