According to a government application for the forfeit of a property in California, the United States tax authorities deceived into sending $13.8 million to fraudsters who filed fake refund claims to the tune of $210 million. Supposedly carried out between 2016 and 2020, it might be one of the biggest tax refund frauds ever observed in the country.
Furthermore, the Internal Revenue Service (IRS) just detailed one of the suspected activities of the schemers, who filed fake tax returns through a trust he ran and claimed to receive noteworthy interest income from several major banks along with electric car manufacturer Tesla and payments PayPal, the forfeiture application reads. In addition, interest income is the sum payable from a firm to a lender or investor for taking their money.
In the court filing, the suspect named as a principal orchestrator of the scam informed the IRS that those firms paid that income to the IRS, but the tax authority said the claims were entirely fictional, according to the statistics of the government. According to IRS, using those fraud funds, the suspect bought a $1.8 million property in Malibu, California, which was actually the theme of the forfeiture application.
No Charges Filed Against the Suspect
IRS claimed that in one of his form submissions to the agency, the suspect attached a claimed letter and confirmation of postage, signed by the suspect, addressed to the CEO of the PayPal office, asking that the firm file its own form regarding tax and debt issues. However, the IRS checked the suspect’s claims against its agency records for filings from PayPal, Tesla, and the banks and found that there was no pending interest income.
Yet no charges filed against the suspect, and he declined the request for comment at the time of publication. Furthermore, a spokesman of IRS said the $13.8 million used to acquire assets other assets than the property but did not describe what assets. Last Thursday, the civil forfeiture action issued. The spokesman of the IRS said that they would not provide further remarks on the complaint.
If the IRS claims are true, the wrongdoing would be massive compared to others in history, especially approximately $14 million the accused could recover from the government. According to a Treasury Department report, for the tax year of 2020, the IRS discovered thirty thousand and thirty-eight fraudulent refund returns, adding up $135 million in refunds.
However, IRS managed to prevent $133 million actually refunded amount, which means it returned only two million dollars. As of February 2021, the tax processing year of 2021, IRS identified sixteen million dollars of fraudulent refunds, with $3.5 million returned to the filer.
Moreover, according to the 2020 annual report of IRS, the department initiated overall seventy investigations into doubtful refunds last year. That was out of sixteen hundred investigations and came in the same previous year that the agency identified $2.3 billion in tax fraud schemes.