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Prison News > More Efforts Needed to Ensure the Internal Revenue Service Prisoner File Is Accurate and Complete

More Efforts Needed to Ensure the Internal Revenue Service Prisoner File Is Accurate and Complete

Refund fraud committed by prisoners remains a significant problem for tax administration. The number of fraudulent tax returns filed by prisoners and identified by the Internal Revenue Service (IRS) has increased from more than 18,000 tax returns in Calendar Year 2004 to more than 91,000 tax returns in Calendar Year 2010. The refunds claimed on these tax returns increased from $68 million to $757 million … To combat this growing problem, the IRS compiles a list of prisoners (Prisoner File) from the Federal Bureau of Prisons and State Departments of Corrections. Various IRS offices and functions use the Prisoner File to prevent and detect fraud committed by prisoners, including the filing of fraudulent tax returns” (p. 1). Results from an evaluation of the IRS Prisoner Files’ accuracy are presented. This report looks at: laws and regulations relating to prisoners and taxes—the Inmate Tax Fraud Prevention Act of 2008, and Executive Order 13250; the Prisoner File being the foundation for the IRS’s efforts to prevent prisoners from getting fraudulent refunds; a prior review in December 2010 indicating that the Prisoner File failed to do its job; the IRS taking steps to improve data reliability; the 2012 Prisoner File having inaccurate identifying data on individual prisoners; prisoner and institutional files being incomplete and containing inaccurate data; the limited ability of the IRS to resolve discrepancies in prisoner records; the expiration of a law giving the IRS authority to inform prison officials about prisoners who filed fraudulent tax returns; inaccurate and incomplete prisoner information negatively impacting IRS functions; and two recommendations to ensure Prisoner File accuracy and comprehensiveness [read the full story here]

National Institute of Corrections, Tuesday, July 30, 2013
Tags: Correctional Policy & Decision-Making, Federal


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