Nine Indicted for Alleged Electronic Tax Fraud : Enforcement: The IRS is cracking down on those suspected of cheating while using computer-filed returns to get refunds.
If you are owed a tax refund, filing your return electronically has the advantage of getting the money to you quicker. If you do not deserve the refund, the electronic system gets federal investigators after you quicker too.
On Wednesday, the Justice Department announced the indictments of nine people in the Los Angeles area for electronically filing false tax returns for 1990. By allegedly claiming refunds owed to fictitious persons, they were able to collect thousands of dollars.
But officials of the Justice Department and the Internal Revenue Service said they will move quickly to prosecute those charged as tax cheats.
“Because of the speed with which electronically filed refund claims can be processed, abuses of the electronically filed refund claims must be detected and punished as quickly as possible,” said Shirley D. Peterson, assistant attorney general in charge of the tax division.
She said government prosecutors are “streamlining” their tax investigations, refering cases quickly to grand juries.
Electronic filing of tax returns began several years ago as an experiment involving 25,000 returns. But this year, about 7.5 million people filed their returns via computer.
The criminal indictments announced Wednesday do not involve mistakes or questionable claims made on tax returns, IRS officials said. Rather, they involve alleged schemes to claim refunds for phony persons or for inflated wage claims.
The Los Angeles-area indictments included 11 counts charging Ernest A. Tafoya, also known as Albert Corona, with gaining $28,000 in fictitious tax refunds for 1990 and Andrea K. Harrison with seeking $22,000 in undeserved refunds by filing phony returns under six different names.
Also indicted in the Los Angeles area were Pablo Lamas, Lewis Onuohah (also known as Lewis Lloyd and Lewis McLloyd), Charles O. Onuorah (who uses the alias of Charles Obi), Roland H. Lilly Jr., Rose Etta Pree, Robert J. Van Over and Neomia La Juan Blockmon.
IRS officials admitted that they do not have the capability to instantly recognize a phony return in which the Social Security number is wrong or the W-2 form cites wages from a nonexistent business.
“We don’t have the computer capability to match up the names and the Social Security numbers immediately,” IRS spokeswoman Ellen Murphy said. As a result, a refund can be obtained via a transparently phony return.
But, Murphy said, “we do detect those schemes in a few weeks, and now we are moving quickly to deal with them.”
In recent weeks, other indictments have been handed down in New York, Florida, Iowa and Ohio involving false returns filed electronically.
The Justice Department said it is pursuing more than $500,000 in phony electronic tax refunds. Investigators said that as much as $6 million may have been refunded based on such fraudulent returns.
