Tax frauds will go to any length to scam taxpayers. The
current scam targets the homeless, drug addicts and the poor by duping them into signing blank tax forms in
return of “free” government money. Afterward, the fraudsters receive large refunds,
most of which they pocket as a “fee”.
Tax frauds use the Earned Income tax credit (EIC) to claim refunds
and enter false information on the tax forms signed by their “clients”. Between
2008 and 2011 fraudsters, Isaiah Konkus of San Diego and Justin Petersen of Lakeside
cheated the government out of thousands of dollars using false tax returns.
The fraudsters filed more than a thousand false tax returns
during those three years, while also falsifing their own tax returns to colelct
more than $35,000 each, according to prosecutors. They pled guilty to all
charges in October 2012.
It is important to know the various methods tax frauds use
to dupe taxpayers and the government, to be able to take timely action to against
the fraudsters.
Targeting homeless shelters, trolley stations, and single
mothers, tax frauds put forward tempting deals of free money to attract lower
income taxpayers. Indulging in such fraud is a tax crime that can lead to
penalties, fines, and/or imprisonment.
The IRS has been fighting tax fraud for years, but the
extent of tax fraud steadily increases. The IRS complains that a lack of
enforcement staff and their limited resources as the reasons for their
inability to control the extent of tax fraud. Meanwhile, tax fraudsters get away
with large amounts of tax money without punishment. At the end of the day,
ultimate protection lies with the taxpayer, as authorities are failing to bring
down tax fraud.