Tax Rebates & Refunds

U.S. prisoners tried to claim $1.1bn in fraudulent tax rebates in 2012

January 25, 2013
Posted in Fraud — Written by Geoffrey

It has recently been revealed that in 2012, offenders in the U.S. prison system attempted to claim more than $1.1 billion (£690 million) from the public purse by filing fraudulent tax returns.

The Internal Revenue Service (IRS), which is the U.S. version of the UK’s HM Revenue & Customs (HMRC), managed to block the claims, which were made via a total of 173,000 fraudulent tax returns.

A report published by J Russell George, the inspector-general for tax administration for the U.S Treasury, claimed that fraudulent tax rebate claims from prison inmates has been rising over the last few years. Around 77,000 cases were picked up in 2010, followed by 168,000 cases in 2011 and 173,000 in 2012.

In the report, J Russell George said:

“Refund fraud committed by prisoners remains a significant problem for tax administration,”

Although the Treasury Department states that it is stepping up measures to stop tax fraud, it is clear that more needs to be done to prevent this particular issue. A principle problem seems to be that fraudulent tax returns sent in by prisoners, as well as other types of tax rebate fraud, are not spotted until the money has been paid out by the IRS.

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