Officials in California sighed with relief when the recent IRS report on jailhouse tax fraud came out. In a delightful change, California finished second to Florida.
Enough with the humor. The reason I wrote this is that Senator Bill Nelson (D-FL) is rather upset about this. This past Friday, Senator Nelson said in a speech in Jacksonville,
I am concerned that more than eight months after Congress passed a measure to crack down on tax fraud by prison inmates at state correctional institutions, the Internal Revenue Service and Florida Department of Corrections have yet to reach an information-sharing agreement that will help state prison officials identify prisoners filing false tax returns.
While the IRS’ public response is that they are working hard on the problem, one fraud ring in a Key West jail was stopped only because, according to the Florida Sun-Sentinel, “…one of [the inmates] left a how-to note in his cell.”
Most of the time, criminals don’t stoop to that level of Bozo behavior. Senator Nelson and other Senators wrote IRS Commissioner Douglas Shulman complaining about the laxness of IRS efforts in stopping this fraud. In Florida, it will be the state corrections officials who will be doing some of the stopping; soon, all envelopes containing tax returns that will be filed from Florida prisons will be stamped with a notation noting that it came from an inmate. Hopefully, the IRS will read that.
Of course, tax professionals see the IRS’ efforts in making sure that every tax professional gets a license, and that continuing education programs are under an electron microscope for their curricula. Perhaps the IRS should look at utilizing some resources on prisoner fraud as it is costing the government and taxpayers money.