Witnesses, including an anonymous inmate serving time in a South Carolina corrections facility, said prisoners use a variety of tactics to cheat the tax system.
Schemes include filing false tax returns using stolen Social Security numbers, filing false forms, or claiming tax credits to which the prisoners were not entitled, [IRS Criminal Investigation Chief Nancy J.] Jardini said.
The inmate said that , he filed between 600 and 700 false returns for himself and fellow inmates, of which about 90 percent successfully resulted in refunds.
The total amount he claimed in refunds was approximately $3.5 million, he said.
Inmates often use accomplices outside of the prison system to carry out their schemes, witnesses said.
In fact, according to Rep. Ric Keller, R-Fla., one person recently indicted for helping prisoners commit tax fraud was an IRS employee.
J. Russell George, the Treasury Department’s inspector general for taxation, said IRS figures show that the number of fraudulent tax returns filed by prisoners quadrupled from 4,300 in to 18,000 .
“Of particular concern is the fact that the IRS frequently pays refunds on returns it has identified as fraudulent,” George said.
“In , the IRS paid 36,000 refunds on returns that it determined to be fraudulent; 4,100 of these were issued to prisoners.”
This year, IRS officials detected $68 million in false tax refund applications filed by 18,000 U.S. prisoners for .
That accounted for more than one-seventh of all phony refunds nationwide.
In Arizona, convicts were responsible for roughly half of the $600,000 in fraudulent claims detected by Department of Revenue investigators .…
Nancy Jardini, chief of IRS criminal investigations, told a House subcommittee that inmate fraud has increased 700 percent in three years.
“There is no question that prisoner refund fraud is on the rise,” she said.
“Even though prisoner returns comprised less than 1 percent of all individual federal income tax returns filed in , more than 15 percent of false refund returns used prisoner names and taxpayer identification numbers.”
By all accounts, the crime is exacerbated by a simple fact: Inmates have little incentive to stop because they seldom face punishment, from the justice system or prison administrators, when they are caught.
Law enforcement authorities say they just don’t have the resources to investigate criminals who are behind bars.…
During the House subcommittee hearings, an anonymous inmate drove home that point by saying he had filed 700 false returns for $3.5 million worth of refunds.…
…[I]nmates have devised dozens of schemes.
When one succeeds, it is likely to proliferate within a cellblock, then spread to other correctional centers.
Sometimes, ringleaders work out profit-sharing deals with cellmates, using their names and Social Security numbers to file more tax returns.
Or they may just steal the information.
Either way, completed forms are sent to an outside accomplice who forwards them to the IRS, often using a post office box as a return address.
When refunds arrive, the middleman cashes each check, takes a cut and distributes the rest to inmate prison accounts or associates on the outside.
Some of the most sophisticated operations launder money through offshore accounts.
Brad Palmer, an IRS agent, described tax-scamming in Arizona as a “huge” prison enterprise that has infected every type of correctional facility in the state.
“There are a lot of inmates involved.
The difficult part is knowing how many of the schemes are all connected,” Palmer said.
“Once we catch a scheme, they adapt it and find a new system.”
Friday link dump:
Ben Patrick Johnson covers war tax resistance by way of his own tax resisting parents at the BPJ Video Blog.
He interviews his dad, Charles Johnson, about his resistance: the hows and whys and what-happened-nexts.
I had no idea video blogs were this polished.
It looks like some sort of cable news segment.
Prisoner Evangelos Dimitros Soukas testified before Congress a while back about how he stole thousands of dollars from the IRS that the IRS had stolen from taxpayers.
So much for honor among thieves.
Some states, whose governments are suffering from bloated budgets and recession-spawned drops in tax revenue, have decided to issue IOUs instead of tax refunds .
This is causing some taxpayers, many of which are having financial problems of their own this year, to see things a little more clearly than usual.
Like this fellow, who says: “Now let’s be absolutely crystalline clear on this issue: A tax refund is not some kind of bonus.
It’s not a stimulus check.
Not welfare!
It belongs to the taxpayer.
In fact, it’s not much more than a loan that the unwitting taxpayer has made to their state, and as such the government has no god-damned right to the money!” Well, that’s all well-and-good, and I’ve heard such sentiments before, but what’s different and encouraging is that this fellow wants to take the next step and encourage taxpayers to end their tax withholding so that in the future, the government is coming to them, hat-in-hand, rather than the other way around.
Maybe it’ll catch on.
Timothy Coughlin, while serving a life sentence, successfully filed for millions of dollars in fraudulent tax refunds from the IRS.
Or so says this news report. What interested me about the news article was that the conspirators were being prosecuted by a State prosecutor, who expressed frustration that he couldn’t get the feds to take any interest in the case.
The Irish Congress of Trade Unions, among others, is promoting a non-payment campaign against the government water monopoly.
I honestly don’t know much about the issues behind this campaign, and most of the web sites seem to assume that visitors are already up-to-speed.
But this campaign’s bold picket signs helped me find a graphic and a title for my book We Won’t Pay! so I’ll give ’em props for that.
Key West,
Fla. — Detainees at a
South Florida county jail are being accused of scamming the Internal Revenue
Service by filing for fraudulent refunds and taking in as much as $100,000.
About 50 inmates from the Stock Island Detention Center in Key West were
allegedly involved in the scheme.
The detainees allegedly used a standard
IRS
form to claim bogus refunds, filing for about $1 million in all. Most of the
requested refunds were for about $5,000. Many checks were sent directly to
the jail.
The scheme was discovered after a how-to note was found in an inmate’s cell.
A chief local investigator on the case who recently retired tells The Miami
Herald that evidence was brought before a Miami grand jury
. Indictments could come this week.
Some bits and pieces from here and there:
Mencius Moldbug, who has established himself as the voice of the contemporary anti-Whig movement, turned me on to Vaclav Havel’s essay on The Power of the Powerless.
It eloquently describes one of the forms that coerced consent took in communist Eastern Europe.
“Individuals need not believe all these mystifications, but they must behave as though they did, or they must at least tolerate them in silence, or get along well with those who work with them.
For this reason, however, they must live within a lie.
They need not accept the lie.
It is enough for them to have accepted their life with it and in it.
For by this very fact, individuals confirm the system, fulfill the system, make the system, are the system.”
The IRS is so fearful of taxpayer retaliation that it has started to develop a sort of paranoid autoimmune disorder, in which it shuts down and heads for the bunkers at the sign of anything in the least bit unusual — this time, “a suspicious package found near the IRS building — the contents of which were soon found to be harmless.”
You can read more (en español) about Spanish war tax resister Jorge Güemes (see ♇ ) at Utopia Contagiosa
and Insumissia.
You’d think there would be nothing easier for the government than preventing people they’ve already put behind bars from taking money from the government by filing fraudulent tax returns.
Apparently not. Despite this being a problem that has attracted news stories and congressional hearings and such for as long as I remember, the amount of money the IRS gives to prisoners for lying on their tax returns continues to rise.
It has been illuminating and disturbing how the world’s governments and large corporations have obsequiously bowed to the bleatings of the American hatriarchy and joined in the attack on WikiLeaks.
But WikiLeaks has already won this round, and Clinton’s state department are just punch-drunkedly swinging their gloves in the air after the bell.
You may have heard that Visa and PayPal have shut off the flow of funds through their services to WikiLeaks and to the legal fund that helps to protect its team.
But there are still several other ways you can help fund their important work.
If you want to understand more about the theory behind the WikiLeaks strategy, which is strikingly different and more radical than the commonly-deployed references to The Pentagon Papers and such would lead you to believe, you could do worse than read the analysis at zunguzungu.
This is from a series of pages on sources of federal war spending other than
the federal income tax and strategies that war tax resisters can use to reduce
their support of the government in these areas.
Active Methods of Depleting Government Coffers
Description
Anti-war activists turn to war tax resistance for any of a number of related
reasons: to amplify their protest, as a form of conscientious objection, or as
an attempt to reduce the resources available to the government to carry out
its wars.
If you are motivated by the last of these motivations, you may also be
interested in more active ways of reducing government coffers that go beyond
refusal to consent to taxation.
Some of these methods go pretty far afield from war tax resistance, and so
this page only mentions them in passing as examples of ways some resisters at
some times have chosen to actively deplete government resources that might
otherwise be spent on war.
Examples
Filing Paper Returns
These days, more and more people are filing their income tax returns
electronically. This saves the
IRS
money, as it costs about 35¢ on average for the agency to process an
electronically-filed return, compared to an average of $2.87 for a paper
return. You can reduce the efficiency of the government’s tax system, and
thereby the amount of collected taxes available for the government to spend on
the military, by filing paper returns rather than filing electronically.
George Jakabcin, the
IRS
assistant deputy associate chief information officer for systems integration,
said that if half of the people who currently file electronically switched
back to paper filing, “we would be in a world of hurt. We no longer have the
capability to process the additional 43 million returns manually. We no longer
have the facilities, we don’t have the
IT
infrastructure in place to support them, we don’t have the people, and some
would begin to argue that we are beginning to lose the expertise.”
In addition, the
IRS is
less able to track the items on paper returns, which limits the amount of data
available to its enforcement arm. Until everyone (or almost everyone)
switches to electronic filing, much of the information on everyone’s tax
return is unavailable to the
IRS’s
automated compliance checking programs. By filing a paper return, you help
diminish the ability of the
IRS to
go after tax resisters and evaders.
Disabling Tax-Collection Equipment
During the Vietnam War, anti-war activists in the United States interfered
with military conscription by destroying the files at draft boards. War tax
resisters might respond to the financial conscription of war taxes in an
analogous way.
Many historical populist tax resistance movements have included actions
intended to disable or destroy the tax collecting apparatus. For example:
A group in Arizona upset at automated traffic ticket-dispensing cameras
dressed up in Santa suits and disabled the cameras by wrapping them in
gift boxes.
Jack-a-Lents and “Rebeccaites” in England and Wales destroyed toll
booths.
Harassing Tax Collectors
Another way of making the government’s tax collection process less-efficient
and thereby making less money available to the government for war is to make
the jobs of tax collectors more difficult.
In , when two war tax resisters in the
Basque region of Spain were assessed a fine for their resistance, they
paid the fine with 20,000 pennies.
American revolutionaries famously used “tar and feathers” to show tax
collectors they were not wanted.
Many people in the American TEA
Party movement sent tea bags in with their tax returns. This seems benign
enough, but the IRS has seen
so many dangerous-looking things come to its mailrooms (razor blades,
powder meant to look like poison) that they tend to overreact and shut
down their operations for a hazardous materials team to come inspect
whenever they find anything out-of-the-ordinary in an envelope.
Applying for Government Handouts
Some resisters reason that it is not ethical to apply for government benefits
and other handouts while at the same time trying to resist some or all federal
taxes. Other resisters think that there is no contradiction between refusing
to pay for war and taking advantage of other parts of the government. Still
others think that any act that takes money from the government that it might
otherwise spend on war is probably a good thing and they seek to maximize the
amount of money they extract from the government.
Applying for Additional Tax Refunds
One way to take money out of the government’s pocket is to apply for tax
“refunds” above and beyond any that you are legally entitled to.
During the Vietnam War, it was common for American war tax resisters to do
this by declaring extra dependents on their tax returns. Martha Tranquilli,
for instance, on her income tax return
declared the Women’s International League for Peace and Freedom, the War
Resisters League, the American Civil Liberties Union, the International League
for the Rights of Man, and the American Friends Service Committee as her
dependents. “By claiming these organizations,” she said, “this reduced my
taxable income by about 60 per cent, which would go to war. These groups were
entitled to my money. They were my dependents in as much as I support them.”
Now, with the expansion of the
IRS’s
use of the frivolous filing
penalty, this approach is more daunting.
Some people, including many who are imprisoned in the
U.S. prison system,
simply fabricate tax returns with numbers optimized to maximize the amount of
refundable tax credits and other refunds. For example, over a thousand
prisoners made implausible claims for the “first-time home-buyer tax credit” on
their returns and received over nine million dollars in refunds as a result.
“I’m through with the street crime,” said prisoner Shawn Clark, “I’m strictly
white collar from now on. I love the
IRS!”
Keeping Bureaucrats Busy with Worthless Paperwork / Overcompliance
The more time, effort, and money the government wastes on paperwork and
bureaucracy, the less time, effort, and money it has to devote to torturing
prisoners, bombing weddings, and launching invasions.
In , after the
IRS hit
war tax resister Karl Meyer with a “frivolous filing penalty,” he responded
with what he called “Cabbage Patch Resistance” — filing a new and different
tax return every day to flood the
IRS with
paperwork.
Destroying or Sabotaging Government Property
By destroying or sabotaging government property, you make it more expensive
for the government to do business, and thereby reduce the amount of money it
can spend on the activities, like war, it prefers to replacing damaged
equipment. Property with a direct link to the military is a favorite target.
Anti-war activists around Shannon Airport in Ireland on a number of occasions
disabled U.S.
military aircraft that were using that airport to ferry troops and supplies to
the Iraq War. For instance, Mary Kelly took an axe to a
U.S. Navy 737,
doing $1.5 million in damage, and Ulla Roder disabled a
RAF Tornado
fighter jet. Such activists have won surprising victories in court by
convincing juries that they were acting on the basis of necessity.
Another group disabled 35 refueling trucks at the Fairford military base in
England around the same time.
More recently, anti-war activists broke in to the
ITT/EDO-MGM arms factory in Brighton,
England to destroy equipment involved in the manufacture of parts for fighter
jets and guided missiles and bombs. Operating under cover of night, the
half-dozen decommissioners did about £250,000 in damage. A police inspector
said that “machinery and equipment were so targeted that it could have been
done with a view of bringing business to a standstill. The damage is
significant and the value substantial.” They were acquitted. One reacted to
the verdict by saying: “It’s a real victory for the anti-war movement, The
jury were presented with the facts and they supported our motivations. If
people in Britain knew the truth away from media manipulations they would all
support our actions.”
In a similar action, another set of activists did £350,000 of damage at a
Raytheon plant in Derry, Northern Ireland, and then were acquitted of all
charges by a unanimous jury after they argued that they were acting to prevent
war crimes. Raytheon’s
U.S.-side managers
concluded that “the legal system in Northern Ireland does not offer the degree
of protection to their business that could be expected in other parts of the
world,” and the company decided to abandon their Derry plant.
Encouraging Soldiers to Desert
Encouraging soldiers to desert or defy orders, supporting conscientious objectors, and counter-recruitment, are all ways of (among other things) making it more difficult and expensive for the government to maintain its ability to conduct wars.
Groups like Courage to Resist and the Central Committee for Conscientious Objectors do great work in this area.
War tax resisters can be particularly credible messengers in trying to
persuade military personnel to resist since we, too, are taking risks in our
noncompliance. Conversely, we can help to influence those who promote
conscientious objection in soldiers to practice it as taxpayers. As Thoreau
complained: “The soldier is applauded who refuses to serve in an unjust war by
those who do not refuse to sustain the unjust government which makes the war.”
Resigning Government Jobs
By resigning your government job, even one which is itself fairly benign, you
deprive the government of additional resources and force it to spend more on
replacing you. You also signal your disgust with the government’s activities
and your unwillingness to be associated with it. Gandhi and Tolstoy were
among the theorists of nonviolent resistance who made resignation of
government posts an important part of their strategic thinking.
Blockading Government Facilities
If you can prevent a government facility or that of a military contractor
from operating, to that extent you can cost the war machine time, money, and
other resources.
The ports in Tacoma, Washington, Oakland, California, and Olympia, Washington
have been successfully blockaded on occasion by anti-war protesters to prevent
the loading of ships destined for battlefields around the globe.
On the anniversary of the launch of the Iraq War in
, members of the War Resisters League were
arrested blockading the
IRS
building in Washington. “Just as military recruiters supply bodies for the
war, the
IRS
supplies the funding,” said war tax resister Ed Hedemann. “So, I’m doing my
part in disrupting that relentless flow of money by standing in front of the
IRS
entrance and by refusing to send my taxes to the
IRS.”
Some bits and pieces from here and there:
Carl Kabat celebrated Independence Day by sneaking on to the site where a new nuclear weapons factory is being built in Kansas City, Missouri, and damaging the construction cranes.
Kansas City is the site of the upcoming Autumn NWTRCC national gathering, and I hear tell there will be opportunities for further disruption there.
Someone has started a tax resistance campaign to protest U.S. support of the government of Bahrain.
They have written the IRS with the reasoning behind their conscientious objection and so far have gotten nothing but the familiar “your argument is frivolous” form letter, but they hope to pursue the matter further through legal channels.
Another town in Catalonia, Alella, has begun refusing to forward its municipal taxes to the Spanish central government and is instead paying the money to the Taxation Agency of Catalonia, as part of a spreading Catalan nationalist tax resistance movement.
(Més)
If you missed the conference call with Cindy Sheehan, Ruth Benn, Ed Hedemann and three other war tax resisters talking shop, you can hear a recording here.
The Treasury Inspector General for Tax Administration has an update on tax fraud perpetrated by U.S. prisoners, an industry that has been growing in recent years.
In , prisoners filed at least 91,434 tax returns that claimed $757,600,000 in refunds that they did not legally qualify for.
The IRS caught most of this in time, but still issued $35,200,000 in refunds they wish they hadn’t.
And now these criminal entrepreneurs have struck on the idea of working the game from the other side — they’re impersonating the IRS itself, calling up American citizens, and threatening them with government retribution — such as imminent arrest, deportation, license revocations, or property seizure — if they don’t pay some invented tax liability immediately (but, pay to the scammers, not to the real IRS).
The government calls it the “largest ever” scam of this sort — involving tens of thousands of victims, and millions of dollars in extorted payments.
Hilariously, in warning people about the scam, the Treasury Inspector General for Taxpayer Administration claims:
“If someone unexpectedly calls claiming to be from the IRS and uses threatening language if you don’t pay immediately, that is a sign that it really isn’t the IRS calling,” he [Inspector General J. Russell George] said.
Sounds like Mr. George has never gotten a call from the IRS before!
The upshot of this is that the real IRS is going to have a harder time than usual distinguishing itself from smaller-scale thieves, and is going to have to devote even more energy into trying to assert its legitimacy.
And that’s energy the agency doesn’t have to spare — it has fewer employees now than at any time in the last decade, and much more to do: including implementing much of Obamacare, chasing down the rampant identity thieves, and responding to sweeping Congressional subpoenas regarding the TEA Party-targeting kerfluffle.
Rossella Fidanza tries to ease the fears of Italians who may be contemplating a tax strike by explaining in some detail the long and not particularly frightening process by which the Italian tax authorities pursue those who haven’t coughed up their tribute (a process that’s not too unlike what I’m familiar with in the U.S.).
It’s so easy for a taxpayer in Italy to enter into an installment agreement and then put off the first payment for three and a half years, it seems, that Italian taxpayers could (if they chose) put their government in a world of hurt without risking much of anything themselves.
A West Auckland farmer who has been cheated out of some of his property via eminent domain has decided to take his revenge on the Durham County Council by withholding his council tax until he recovers the promised payment.
