Prisoner filing bogus tax returns gets hefty refund check
NOT THE SHARPEST KNIFE IN THE DRAWER: A NY jury has convicted prison inmate Ronald Williams, 48, of 11 counts of filing false claims and one count of helping another inmate file bogus returns. From 2006 to 2010, Williams filed tax returns seeking $890 million in refunds, The Associated Press reports:
He was actually issued a refund for $327,456 once but prison officials intercepted the check and returned it to the IRS, which led the investigation.
Williams was serving two to four years for possession of stolen property when he was charged in February 2011.
Williams faces up to five years in prison and a fine of up to $250,000 on each of the 12 counts.
Williams is not the only jailhouse CPA out there – nor the only one who’s gotten a refund check fro the IRS, The Post-Standard (Syracuse) reports:
In 2009, the IRS reported that there were 44,944 bogus tax filings from prisoners. The IRS has been working with federal and state prison authorities to try to make it easier to catch prisoner fraud, but a report in April by J. Russell George, the treasury secretary for tax administration, said the IRS is not doing enough.
George told Congress that the 2009 number was likely much higher because the IRS didn’t have enough command of the data to ensure it was accurate.
It’s hard to get a handle on exactly how much the IRS is losing every year to prison tax fraud, said Richard T. Ainsworth, a Boston University professor who has studied the problem.
He said that in 2009, inmates claimed more than $295 million in refunds they weren’t owed. The IRS stopped most of those from being paid, but sent out $39 million in refund checks. It’s unclear how much of that $39 million in checks was cashed and eventually lost.
Since Williams’ caper, Ainsworth said, the IRS has a new system. Computers check return addresses against prison addresses and automatically put those filings under greater scrutiny.
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