Word: refund
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Dates: during 1990-1999
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...Coop: A refund--no, giving...
...making him look as if he were hiring them) and transcribed both numbers onto W-2 forms that he used to prepare electronic returns. Todd filled in an income for these women and a figure for taxes withheld that was high enough to kick back a generous refund. Todd then took the returns to banks to obtain "refund anticipation" loans, which came through within 48 hours. Todd's take was an estimated $511,000 over two years (tax free, of course) before an informant tipped off the IRS. He was sentenced to 30 months in jail...
Richard M. Hersch of Florida and Pennsylvania owned a tax-preparation company called Quik Tax Dollars that he turned into Quik cash. In 1991 he filed 145 false returns, using W-2 forms, fictitious names and phony Social Security numbers to get refunds for the phantom taxpayers. He too received refund anticipation loans. When the IRS began to improve its control on Social Security numbers, Hersch started using real numbers to perpetrate the same scam. All told, he filed 431 false electronic returns claiming refunds of $1,131,241. He was nabbed after the IRS raided his office...
...hustled to catch up with these scams. It ended its arrangement with banks in the refund-loan program in early 1995. At the same time, it made an emergency installation of computer filters to screen electronic returns. "It amounted to the sort of front-end screen the credit-card industry does at the point of sale," says assistant IRS commissioner Ted Brown. With new filters, the IRS discovered 4.1 million "problems" with Social Security numbers--an increase of more than 3 million from the year before. In 1995, 1.8 million dependents suddenly disappeared from the system, and there were...
...says a staff member on the restructuring commission, "was that they did not have the ability to go after 6 million people, so the agency arbitrarily took 800,000 to a million cases and tried to deal with them." According to the GAO, the IRS released 2 million questionable refund checks that year, even though its computers had detected irregularities...