Minnesota Inmates Filed $400K in False Tax Refunds

Published On: 1st September 2014

From the internet

Two inmates at a prison in Minnesota are accused of filing false tax returns totaling $400,000, according to the U.S. Attorney’s Office.

Both men were charged of one count of conspiracy to defraud the U.S. and 10 counts each of filing false claims.

According to the indictment, the men recruited other prisoners at the correctional facility to prepare and file false tax returns and illegally claim the refunds, which were direct deposited into their bank accounts, sent to them in check-form, or deposited onto debit cards.

Three co-conspirators that were not incarcerated have pleaded guilty to conspiracy. One of those individuals was sentenced in early August, while the other two are still awaiting their sentencing. The three co-conspirators had cashed the fraudulent refund checks using Power of Attorney signed by one of the incarcerated men.

Unfortunately, these fraudulent tax refunds were the direct result of identity theft. When an identity thief is able to get a hold of a person’s personal information, they can file a tax return using that information, thus receiving a fraudulent refund.

A lost or stolen wallet, a data breach, stolen mail, a stolen social security number, or providing information to a caller over the telephone who is actually a fraudsters are all reasons why a person’s information may be stolen for the purpose of stealing their tax refunds.

While the IRS will take action against tax fraud due to identity theft, the victims have to take action as well. The IRS, nonetheless, is increasing their efforts to help the victims. In fact, the IRS is typically the first to inform a victim that identity theft has occurred. The IRS then works diligently to resolve the theft as soon as possible. Programs are being developed to protect taxpayers from future misuse of their personal information. Any time that a person’s information is compromised, the tax administration is impacted in addition to the identity theft victim.

Although the IRS has made a great deal of progress in the area of tax fraud due to identity theft, much more work needs to be done. Fighting identity theft is an ongoing battle as the crime continues to involve new ways to steal peoples’ identities. These are some of the most complex criminal cases that the IRS handles, so the IRS is always reviewing their policies and processes to minimize the incidence of identity theft and to help individuals who find themselves victims of the crime.

The filing PIN is one of the measures that have been put in place to protect taxpayers against identity theft. The number is only known by the taxpayer. To obtain the PIN, a taxpayer has to know their adjusted gross income for the previous year, as well as other pieces of information. This multi-step process of obtaining a PIN may not fight identity theft 100 percent, but it is just one measure put in place by the IRS to fight such cases as the Faribault inmates whole filed the nearly half million dollars in fraudulent returns.

http://minnesota.cbslocal.com/2014/08/19/mn-inmates-charged-with-filing-400k-in-false-tax-returns/

http://www.irs.gov/uac/Identity-Protection

http://www.irs.gov/uac/Newsroom/IRS-Combats-Identity-Theft-and-Refund-Fraud-on-Many-Fronts-2014