When accounting goes unaccounted for
This is what happens when tax breaks are used as political favors:
Tax consultants estimate that eligible businesses obtain as little as 5% of the main domestic tax breaks that they are entitled to claim. That means firms are leaving tens of billions of dollars on the table every year. Out of 1.78 million corporate tax returns in the U.S., only about 20,000 claimed any of the three dozen main business tax credits in the code, according to IRS estimates.
Aka “The world’s best tax law firm.”
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We here at Going Concern have always (well, except from May 17, 2018 to July […]
As we have learned, residents of our prison system have proven to be quite savvy at obtaining tax credits, including those intended for first-time homebuyers, alternative-fuel vehicles as well as filing bogus tax returns in order to receive refunds. These scams go along swimmingly until the IRS gets wind of it (anywhere from months to years later), at which time local (and sometimes national) media have some nice filler.
In the latest case of a prisoner tax schemed sniffed out, Troy Fears – who is enjoying a life’s stay in an Arizona prison for rape – spent 2005 to 2009 filing fake tax returns and obtained $119k in the process. He was using “fake W-2’s and apparently said he was filing other inmates’ taxes. He convinced other prisoners he was applying for grants on their behalf so he could get their Social Security numbers.” According to court papers, the IRS was missing this particular scam because “IRS routes [direct deposits] without making sure the name on the account matches the return.” The jig was up when a prison guard intercepted his mail, presumably figured out the tax returns were fakes, and called the authorities. Fears got four years tacked on to his sentence and the guard responsible for catching him can probably expect a “Deputy IRS Agent” certificate (signed by Doug Shulman, natch) in the mail any day now.
Jailed Rapist Gets $119K From Fake Tax Returns [KPHO via TaxProf]