The New York City NBC affiliate reported this week that twenty six professional tax preparers were wanted or arrested on tax fraud charges as the result of a recent crackdown. Some of the preparers allegedly used the names of dead people to collect fraudulent returns. Apparently, this scam had been going on since at least 2001.
Such blatant malfeasance would have likely been caught much sooner if the tax code was simpler and the IRS did not have to waste time on enforcement of arcane, ambiguous and complex provisions. Furthermore, under a simple tax system (such as a flat or fair tax) there would not be professional tax preparers to begin with.
Dead people were claiming tax refunds and the children of strangers were listed as dependents.
Those were among the bold scams that 26 Bronx and Manhattan tax preparers were allegedly using to claim the bulk of about $95 million in refunds since 2001, prosecutors said Thursday.
Besides seeing dead people, investigators also spotted deductions for businesses that don’t exist, inflated commissions and identity theft of people living in Puerto Rico, frequent victims of such scams because they have social security numbers but don’t have to file federal tax returns, prosecutors said.
http://www.nbcnewyork.com/news/local-beat/Tax-Returns-of-the-Living-Dead-90266732.html
