The Internal Revenue Service (IRS) prevented $2.1 billion in fraudulent tax refunds filed by prisoners in 2012, largely thanks to stopping two inmates from attempting to collect $1.1 billion from Uncle Sam.
“Refund fraud committed by prisoners remains a significant problem for tax administration,” stated a report by the Treasury Inspector General for the Tax Administration. The report – made public on Thursday – states that in 2012 the IRS uncovered more than 170,000 fraudulent tax returns filed by prisoners.
The Accounts Management Taxpayer Assurance Program reported that from Oct. 1, 2011 to June 30, 2012, there were 173,106 fraudulent returns detected from inmates. Of those, 156,482 were stopped, preventing prisoners from receiving $2.1 billion in fraudulent payments.
In a footnote to the report, however, it states that more than half of the fraud came from only two inmates: “The amount of refunds detected and stopped in Fiscal Year 2012 includes two prisoner tax returns that totaled $1.1 billion in refunds.”