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Prisoners Get Millions in Tax Refund Fraud

Submitted by admin on Thu, 12/2/2010 - 12:00 am

Prisoners across the nation have received over $112 Million in fraudulent tax refund claims, and a watchdog report says the numbers are probably much higher. The number of fraudulent payments to inmates has risen 37% since 2004. According to the Treasury Inspector General for Tax Administration, the IRS does not screen most prisoners’ tax returns. A review of tax records found that 88% of the 287,918 returns filed by prisoners were not screened for potential fraud. Of those, approximately 48,800 returns lacked wage information altogether. Inspector General Russell George said the following in an interview, “There is a major problem with returns being filed fraudulently by people who are incarcerated,?what makes this even more problematic is that we identified this as a problem more than five years ago. The problem not only persists, but it’s gotten even worse.”

The IRS states that they are making very good progress in identifying cases of fraud. Overall, throughout the general public, the agency has stopped approximately 250,000 fraudulent returns totaling $1.48 Billion through March of 2010.

The IRS is working with state and federal officials to ensure timely updates to improve detection and prevention of prisoner fraud.