December 3, 2010

Inmates Commit $130 Million in Tax Fraud in 2009! Prisoners Use Basic Tax Forms to Claim Phony Income or Tax Credits, Often With no Supporting Documents!

And most Americans still have the NERVE to question why the T.E.A. party exist?! Because law abiding taxpaying Americans are tired of being FLEECED by our government in order to continue supporting their INCOMPETENCE and the DIRTY ROTTEN SCOUNDRELS otherwise known as our represenatives and the MAFIA otherwise known as the public service government employee LABOR UNIONS!!!

CBS News
written by Armen Keteyian
Wednesday December 1, 2010

(CBS) Chief investigative correspondent Armen Keteyian reports on a group of tax cheats all too familiar with crime. They're running a multi-million dollar tax scam from behind bars.

While working in prison, inmates learn the meaning of hard time. Pay is limited to an average of just 35 cents an hour, well below what's required to file a federal tax return.

But CBS News has learned that hasn't stopped tens of thousands of prisoners from ripping off the IRS at taxpayer expense.

(Scroll down to watch the video.)

"You're in prison anyway," said one inmate. "What are they going to do to you?"

Prisoners like him, who asked we conceal his identity, are filing bogus tax returns from behind bars.

A scam so big, CBS News has learned, prisoners last year collected a staggering $130 million in tax refunds they didn't deserve.

"They were just filling out the forms," said the prisoner.

Using basic tax forms, available inside all prisons, state and federal inmates claim phony income or tax credits, often with no supporting documents. The refund checks they collect range from a few hundred dollars to as much as $8,000 each.

Some prisoners file multiple returns year after year.

"They'll file 10, 20 of them at a time just to see which ones do come through and which ones don't," said the prisoner.

An IRS document, obtained exclusively by CBS News, shows inmates filed nearly 45,000 bogus returns for the tax year 2009.

Florida (8,777), Georgia (7,351) and California (3,713) state prisons top the list.

The single worst offender was an Ohio facility, where nearly 30 percent of the inmates filed false returns with the IRS for 2009. But when CBS News contacted the prison, they had no idea about the problem, saying in an email, "This is not an issue."

"The IRS is processing these returns, it makes no sense," said IRS inspector general J. Russell George.

George is the treasury inspector general for tax administration. He's releasing a detailed report Thursday.

It finds 253,929 tax returns filed by prisoners for 2009 were never reviewed by the IRS - that's 88 percent.

"The IRS could have easily, in our view, identified these people and yet failed to do so," said George.

Late this afternoon, after repeated requests from CBS News, the IRS finally sent us a statement. It says in part, "…the IRS remains focused on improving our techniques to address this type of fraud. However, without Congressional action to require state and federal prisons to report on the status of inmates to the IRS, there will be gaps in the prison data and compliance problems will persist."

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