IRS paid $112 million in bogus refunds to prisoners in 2009

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Imagine being locked up in prison, with no job, no income and nothing to do. If you were like 48,800 others in the nation’s prison system, you filed a bogus tax return and waited to see if the IRS would catch it, or send you a check.

Odds were pretty good that you’d get a check, according to a newly released report.

Last year, prisoners filed fraudulent tax returns claiming refunds of $130 million and the IRS paid a total of $112 million on those returns, according to the Treasury Inspector General for Tax Administration (TIGTA). The problem is difficult to catch says the agency, because some of the inmates and their families are legally entitled to tax refunds.

The report claims that the problem is getting worse, with fraudulent returns rising by 37 percent since 2004, when the issue was first identified. Despite the rampant fraud, only 12 percent of the 287,918 filed by prisoners were screened for potential fraud.

“The IRS takes refund fraud seriously and has programs in place to aggressively combat it,” agency spokesman Terry Lemons said in a statement. Hard to believe considering so few prisoners’ return are being examined, and so much is being paid out.

The Washington Post

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