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Started By
Message
IRS gives man 980k tax refund on....18k worth of income
Posted on 3/22/19 at 7:21 am
Posted on 3/22/19 at 7:21 am
GUBMENT!
CNBC Link
CNBC Link
quote:
There are big tax refunds, and then there are $980,000 tax refunds.
Ramon Christopher Blanchett, of Tampa, Florida, and self-described freelancer, managed to scoop up a $980,000 tax refund after submitting his self-prepared 2016 tax return.
He also allegedly claimed that he earned a total of $18,497 in wages — and that he had withheld $1 million in income taxes, according to a Jan. 18 forfeiture complaint filed by the U.S. Attorney's Office.
In reality, Blanchett received $2,098 in wages from one employer and $1,399 from another employer, according to the complaint.
He withheld no federal income taxes from either, the U.S. Attorney's Office said in the filing.
The story was initially reported by the Tampa Bay Times.
Blanchett could not be reached by CNBC for comment. His contact information was not immediately available, and no attorney was listed for him in the U.S. Attorney's complaint.
Though the massive refund check made it out the door at the IRS, the taxman is taking steps to get the money back.
Thus far, Uncle Sam has managed to seize $919,251 from three bank accounts and a 2016 silver Lexus RC registered in Blanchett's name.
The U.S. Attorney's Office is now fighting over $809.94 — the amount of money refunded to Blanchett when he cancelled the insurance coverage on the Lexus, according to the complaint.
Here's how a case like this one might slip through the cracks.
Fraud prevention
While the IRS Criminal Investigation Unit managed to identify $9.69 billion in tax fraud in 2018, and it initiated 1,714 investigations around tax crimes, sometimes phony returns slip through.
"We have filters to try to detect fraudulent refunds and claims, but there are the ones that get through and get paid," said Eric Smith, a spokesman for the IRS.
The IRS can head off phony tax returns by matching them to the information returns businesses send the tax agency to show that they've paid someone, said Leandra Lederman, a tax law professor at Indiana University's Maurer School of Law.
The agency's fraud detection systems were able to protect $7.6 billion in revenue between Jan. 1 and Sept. 30 last year, but they delayed the processing of nearly $20 billion in legitimate refunds, according to the Taxpayer Advocate Service's 2018 annual report to Congress.
"There's pressure on the IRS to get refunds out to people quickly," Lederman said.
There's an additional set of checks and balances in place for very large tax refunds.
That kicks in at a high threshold: The Joint Committee on Taxation is supposed to review tax refunds that exceed $2 million (or $5 million if the taxpayer is a C-corporation).
Revamping systems
Additional funding for the IRS — particularly an investment in its computer systems — could help the agency better sniff out suspicious returns, tax experts said.
In fact, the Taxpayer Advocate Service's top recommendation in its 2018 report was for Congress to increase IRS resources so that the agency can replace its IT systems.
The agency received $11.43 billion in funding last year, of which $110 million went toward its tech upgrades via its Business Systems Modernization Account.
"It comes down to how the system was functioning and whether it was properly staffed," said Mark W. Everson, former IRS commissioner from 2003 until 2007 and vice chairman of Alliantgroup, a tax consultancy.
"Resource constraints affect that almost inevitably," he said.
This post was edited on 3/22/19 at 7:23 am
Posted on 3/22/19 at 7:31 am to 50_Tiger
quote:
He also allegedly claimed that he earned a total of $18,497 in wages — and that he had withheld $1 million in income taxes
Can't blame the guy for trying
Posted on 3/22/19 at 7:40 am to 50_Tiger
I could pull it off. Just don;t want to live in China
Posted on 3/22/19 at 7:41 am to 50_Tiger
you get away with something like that you leave the country. Put the money somewhere it cant be touched, and where that amount is goes really far.
Dumbass got cocky. Probably to vlog his experience from top (pulling it off) to bottom (jail).
Dumbass got cocky. Probably to vlog his experience from top (pulling it off) to bottom (jail).
Posted on 3/22/19 at 7:42 am to 50_Tiger
The Mexicans are stealing billions through EITC and phony SS numbers
Posted on 3/22/19 at 8:25 am to 50_Tiger
It's a double edged sword. People want government spending reined in, but when departments get budget cuts, they lose the needed manpower when they are often forced to freeze hiring. IRS enforcement has been on the decline for 5-10 years now.
Posted on 3/22/19 at 8:33 am to 50_Tiger
Why would he be eligible at all?
Posted on 3/22/19 at 8:34 am to 50_Tiger
Damn. If I check the wrong box or forget a specific filing form, these assholes are all over me.
This guy shows $1M in withholding on $18K of income and they blindly cut him a $980K check.
I must be doing it wrong.
This guy shows $1M in withholding on $18K of income and they blindly cut him a $980K check.
I must be doing it wrong.
Posted on 3/22/19 at 8:42 am to Anonymous95
quote:
Damn. If I check the wrong box or forget a specific filing form, these assholes are all over me.
I got audited a few years ago over what turned out to be a couple hundred dollar mistake. Meanwhile they make mistakes like this. The IRS sucks.
Posted on 3/22/19 at 8:46 am to Anonymous95
quote:
This guy shows $1M in withholding on $18K of income and they blindly cut him a $980K check.
And this is why he didn't get audited at first.
If you make under 30 grand you can basically do whatever you want
Posted on 3/22/19 at 8:49 am to The Spleen
quote:
It's a double edged sword. People want government spending reined in, but when departments get budget cuts, they lose the needed manpower when they are often forced to freeze hiring. IRS enforcement has been on the decline for 5-10 years now.
Yeah but I believe income shouldn't be taxed in the first place, so there's that.
Posted on 3/22/19 at 8:55 am to 50_Tiger
I’m thinking of a few things.
1. He’s going to PMITA prison for tax fraud.
2. How the frick does the IRS not have a trap on their system for this?
Some states have refunds held for X number of days as a standard and will hold anything over a certain amount for a series of reviews.
1. He’s going to PMITA prison for tax fraud.
2. How the frick does the IRS not have a trap on their system for this?
Some states have refunds held for X number of days as a standard and will hold anything over a certain amount for a series of reviews.
Posted on 3/22/19 at 8:59 am to PoppaD
quote:
I got audited a few years ago over what turned out to be a couple hundred dollar mistake. Meanwhile they make mistakes like this. The IRS sucks.
Same here. Turns out that the expiration date for an exemption was September 30 not December 31. Had to pay an attorney to basically save a couple hundred bucks. In spite I got audited again the next year.
Posted on 3/22/19 at 10:09 am to The Spleen
quote:
IRS enforcement has been on the decline for 5-10 years now.
Well they shouldn’t exist anyway so there’s that.
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