Federal prosecutions have uncovered tax-fraud schemes involving the theft of Social Security numbers of prisoners, in many cases by corrections employees, the Wall Street Journal reports. Last year alone, federal courts gave prison sentences to an Alabama bail bondsman, two former Alabama corrections employees, a Florida corrections officer and a Georgia man, who were convicted separately of stealing identities of 1,200 prisoners and claiming more than $6.5 million in tax refunds under the inmates' names.
Scores of prisoners also have been prosecuted for preparing false tax returns from behind bars to generate refunds, using their own and other inmates' Social Security numbers. The Treasury Department Inspector General for Tax Administration found that false returns filed with prisoners' Social Security numbers had surged to about 137,000 in 2012 from 37,000 five years earlier. Refunds claimed in the false returns in 2012 amounted to about $1 billion; the Internal Revenue Service prevented all but about $70 million from leaving the Treasury. The Senate Finance Committee discussed the report and other types of tax fraud yesterday.