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January 28, 2023

Lesson of the Day: When Requesting a Bogus Tax Refund, Avoid an Excessive Amount

It makes sense that financial crimes increase during a recession. People get desperate and they start taking crazy-ass chances. Crazy-ass chances like, let’s request a tax refund for a couple hundred million dollars.
Justice.gov:

Papers filed in the cases say the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. One defendant – Dick Jenkins, of Heber City, Utah – allegedly holds himself out as a CPA and requested a $210 million fraudulent refund for one customer. The Internal Revenue Service (IRS) catches the vast majority of the bogus tax returns and blocks the claimed refunds…Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in the seven lawsuits filed this week) have requested a total of $3.3 trillion in fraudulent refunds.

According to the AP, “Officials say the tax preparers often falsely tell customers the government maintains secrets accounts of money for its citizens that can be accessed by filing false returns.”
So your tax preparer tells you that by filing a fake tax return you’ll be able access a secret pile of money. Is this remotely believable? Believable to the point of saying, “Excuse me, Internal Revenue Service, you owe me $210 million”?
Some discretion, people.
DOJ Charges Seven With Seeking $562m of Bogus Tax Refunds [TaxProf Blog]
Feds file suits over $562 million bogus tax claims [AP]

It makes sense that financial crimes increase during a recession. People get desperate and they start taking crazy-ass chances. Crazy-ass chances like, let’s request a tax refund for a couple hundred million dollars.
Justice.gov:

Papers filed in the cases say the defendants prepared tax returns requesting a total of $562.4 million in bogus refunds. One defendant – Dick Jenkins, of Heber City, Utah – allegedly holds himself out as a CPA and requested a $210 million fraudulent refund for one customer. The Internal Revenue Service (IRS) catches the vast majority of the bogus tax returns and blocks the claimed refunds…Altogether, according to the IRS, redemption scheme participants (including customers of the defendants in the seven lawsuits filed this week) have requested a total of $3.3 trillion in fraudulent refunds.

According to the AP, “Officials say the tax preparers often falsely tell customers the government maintains secrets accounts of money for its citizens that can be accessed by filing false returns.”
So your tax preparer tells you that by filing a fake tax return you’ll be able access a secret pile of money. Is this remotely believable? Believable to the point of saying, “Excuse me, Internal Revenue Service, you owe me $210 million”?
Some discretion, people.
DOJ Charges Seven With Seeking $562m of Bogus Tax Refunds [TaxProf Blog]
Feds file suits over $562 million bogus tax claims [AP]

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