Tax Blotter: Tax Refund fraud enforcement and high-profile convictions make headlines.
The US Department of Justice just announced convictions in two high-profile cases for identify theft and tax refund fraud.
In Minneapolis, two Minnesota-based tax preparers were convicted of conspiracy, filing false tax returns and identity theft. Acting Assistant Attorney General Ciraolo announced, "today's verdicts send a clear message that individuals who hold themselves out as tax return preparers, and then prepare and file false returns to steal from the U.S. Treasury, will be prosecuted and will face substantial incarceration and monetary penalties."
The defendants, Ishmael Kosh and Amadou Sangaray, managed Primetime Tax Services, Inc., where they prepared fraudulent tax returns from 2006–2008. Through Primetime, more than 2,000 federal tax reruns were filed. The defendants would inflate deductions or business losses and have the refunds directed to their own location, versus the actual taxpayers' accounts.
In a case in Alabama, Lasondra Miles Davis was convicted for her involvement in a $2.5-million-dollar identity theft and tax refund fraud. Ms. David's mother, Teresa Floyd, was also convicted in the scheme and will be sentenced in October.
The pair operated T & L Tax Service, where they used stolen identities to file more than 900 fraudulent federal tax returns. This included claimed refunds of more than $2.5 million.
The IRS has tips on its website on how to choose a tax preparer. But using review sites like TaxBuzz.com gives you the best confidence that you are working with an ethical professional. The good news is the Department of Justice Tax Division is on many of these scams and continues to make arrests.