Prison Tax Fraud

      Federal Internal Revenue Service auditors now say prison inmates are stealing up to four times more tax

 dollars than they initially thought. A recently released report by the Treasury Inspector General for Tax

Administration shows potentially hundreds of millions of tax dollars are stolen every year by prison inmates

 filing tax returns for work they never did asking for tax refunds they aren’t due. Denise Platt's identity was

 stolen by a Florida inmate over a year ago. Platt became very worried when the IRS didn’t seem to

 understand what had happened to her and to the tax refund money the government was supposed to send

 her but sent to the person who’d stolen her identity. " I was very frustrated. Everything seemed hopeless,"

 said Platt. Platt eventually lost her patience with the IRS when they kept sending tax refund checks to the

 person who posed as her, the person who stole her identity. The IRS sent the refund checks to the thief’s

 address even after “Dee” formally notified the IRS exactly what was going on by filing official paperwork

 with the government.

     Prison inmates continue to file false tax returns for work they never do, often listing employing companies

 that don’t exist, then get refunds they aren’t due. Congress has now put in law in place in 2008 (Inmate Tax

 Fraud Prevention Act of 2008) to help plug holes that allow this prison tax scam while requiring the IRS to

 be more active in addressing and stopping this fraud.

     Tax crimes are not just for fraudulent individuals and tax preparers, but have now become a fixture with

 inmates as well. If a person gets caught with a tax crime there are some serious penalties that come with it.

If you are convicted of a tax crime after putting the government to the trouble of a trial, chances are eight in

 ten that you will be sent to federal prison. The Federal Sentencing Guidelines and the judge determine how

 long the sentence will be.

     In general, public figures are most likely to go to jail. Back in the 30s, President Hoover ordered that our

 income tax evasion law be used to put away the notorious Al Capone. This is the only charge ever made to

 stick on Scarface, who found his way to Alcatraz. Richard Hatch failed to pay his taxes with the $1,000,000

he won on the show Survivor, but he didn’t survive the IRS police; he was sentenced to 51 months in federal

 prison.

      Tax convicts are usually sent to a Club Fed minimum security facility filled with bankers, lawyers,

 politicians, and Wall Street sharpies. The average length of time served for a tax crime is a little less than two

 years. Tax alumni of the federal prison system all agree that it was a humiliating and crushing experience.

 And licensed professionals—lawyers, doctors, stockbrokers, and CPAs—lose their professional licenses

 after conviction.