Birmingham, Alabama resident, Douglas Ervin Dent, 66, was indicted for his part in a tax refund scheme to collect millions of dollars from the Internal Revenue Service using false tax returns.
Between April 2008 and October 2009, Dent allegedly filed 20 false income tax returns in his own name and on behalf of others. Each false tax return contained the following:
- A claim that money had been earned by the taxpayer and withheld by various financial institutions during the tax year.
- The taxpayer was entitled to refunds of those withholdings from the IRS.
Among the 20 false returns, Dent filed four in his name and one in the name of his deceased mother. The requested refunds on these five returns totaled more than $2.6 million.
According to the indictment, Dent knew that he and the other taxpayers were not entitled to the $6.2 million in refunds he claimed and that no such earnings and withholdings had occurred.
If convicted for his role in the refund scheme, Dent faces up to five years in prison and a $250,000 fine. U.S. Attorney Joyce White Vance said in a statement, “Criminals who scheme to avoid paying taxes or to steal money from the U.S. Treasury will be prosecuted.”
She’s not kidding. Just last week, I wrote a post about the increase in criminal investigations based on the recently released IRS Criminal Investigation Annual Report for 2012. The report shows initiated investigations and prosecution recommendations both up nearly 9 percent in fiscal 2012 compared to 2011.
Taxpayers are encouraged to avoid any type of tax scheme at all costs – especially if it “sounds too good to be true.” Mr. Dent’s case shows the government is quite eager to go after those who may be evading or cheating on their taxes and put them in jail. Identity theft and tax refund fraud are major tax problems for the IRS. The IRS has more than doubled the employees working on identity theft and refund scheme cases in an attempt to stamp out this pernicious tax crime.
If you already have tax troubles due to significant tax debt or are under audit one way or another, you are going to have to face the IRS. It’s just not in your best interests to face them alone. You will want expert audit representation from a qualified tax audit specialist or tax attorney with success in handling cases like yours to the IRS. This team of tax resolution experts can help you reduce back taxes, IRS penalties and interest and meet with the IRS auditor so you don’t have to.
Additional tax trouble articles are available here: http://www.taxresolution.com/trs-publications.asp