Man Indicted for Tax Fraud Involving Computer
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PORTLAND, Ore. — Federal authorities say a Portland man has been indicted in the nation’s first case of income tax fraud involving electronic filing of tax returns.
Donald J. Penrod, 42, is accused in a 12-count indictment of fraudulently applying for tax refunds under false names through a professional tax-return preparer in Vancouver, Wash. The preparer was not charged.
A federal grand jury in Portland returned the indictment Thursday.
Penrod borrowed money from financial institutions based on the fraudulent tax refunds he expected to receive, said Lance Caldwell, an assistant U.S. attorney for Oregon.
Electronic filing of federal income-tax returns is available in 16 regions, one of which includes Washington. The program, initiated by the Internal Revenue Service in 1986, permits professional tax-return preparers to electronically transmit returns via computers to IRS offices, Caldwell said.
The IRS says the program results in faster processing of returns and lower costs. It is expected to be available nationally by the mid-1990s.
Penrod assumed the identities of dead or fictitious people, Caldwell said. False W-2 forms allegedly were prepared for the tax returns.
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