Accounting Today

Prisoner tax fraud: How they did it.

According to IRS criminal investigation chief Nancy J. Jardini, the schemes being employed by prison inmates to scam the tax system range from simple instances of misrepresentation, to elaborate deceptions involving identity theft, document falsification and the use of outside accomplices.

Among the specific examples that she rattled off during testimony before the House Ways & Means Oversight Subcommittee:

* In 2003, a Florida prisoner serving a life sentence was sentenced to 33 additional months in prison for filing false tax claims. The prisoner prepared 64 fraudulent tax returns for other prisoners using their names and Social Security numbers. He also …

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