It takes effort to stay trendy.  You can’t walk around in the coolest clothes, drive the hippest car and sing lyrics to the most popular songs without good research.  That being said, you may have one question, “Does the same effort apply to staying current with fraud trends?”  It takes time and effort to commit fraud, and even more of the same to get away with it.  According to an article highlighted in CorrectionsOne.com, Ohio inmates collectively exerted a multitude of effort in an upward trending tax refund fraud scam.

A spike in identity theft amongst Ohio inmates resulted in an upward trend of bogus tax returns, causing the taxpayers to suffer.  According to data obtained by the Treasury Inspector General for Tax Administration, the number of false tax returns made by U.S. prisoners increased five-fold between 2004 and 2010.  In 2010, prisoners received $35.2 million in bogus returns alone.  So why does it seem so easy for inmates to cash in while they are in the slammer?

Until recently, the Internal Revenue Service (IRS) did not have access to accurate state and federal prisoner data for screening to prevent tax fraud.  Luckily for the IRS, a recent change in federal laws has granted better access to pertinent prisoner information needed to prevent fraud.  An assistant U.S. attorney for the Northern District of Ohio commented:  “Hopefully it is becoming an easier crime to catch…There are just so many (returns), and there is the pressure to get them out, and some of these (bogus returns) can get through.”

The IRS revealed Ohio prisons submitted 2,189 false tax returns in 2010, a 50 percent increase from 2009. (That’s a huge increase in just one year.) An employee of the IRS regional office in Columbus explained:  “When accurate prison data is available, the IRS is very successful at detecting and stopping incorrect funds.”  The IRS was able to identify and stop more than $722 million in bogus claims sought by inmates in 2010. (Just think about how much more fraud they could have detected with visibility into state and federal prisoner data.) Both the IRS and the Federal Bureau of Prisons are making efforts to combat prisoner tax refund fraud a priority.

If one thing is trending, it will be the increase in extended prison time for inmates caught submitting false tax returns.  You couldn’t beat the system the first time; don’t think you can beat the system the second time around while you’re sitting there in jail.

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