Archive | Fraud

Grammy winner Lauryn Hill, celebrity tax evader, gets no love from the IRS

By on May 14, 2013 in Fraud, Internal Revenue Service

It’s pretty easy to skip filing a tax return. Even a second or third return. But sooner or later, the IRS has a habit of catching up with you. Especially if you’re a high-profile rich person, like hip-hop and R&B artist and eight-time Grammy winner Lauryn Hill.

Hill was sentenced to three months in prison and another three months of home confinement after failing to file tax returns in 2005, 2006 and 2007, as reported in the New York Times. She’s supposed to report to prison on July 8.

Her attorney said before the sentencing that Hill had paid more than $900,000 to settle her tax debts and penalties, according to the Huffington Post. Hill didn’t pony up until after federal judge Madeline Cox Arleo criticized her in court in Newark, saying, “This is not someone who stands before the court penniless. This is a criminal matter. Actions speak louder than words, and there has been no effort here to pay these taxes.”

Apparently the payment didn’t mollify Arleo, who obviously felt Hill deserved a little quiet time to think over her bad behavior.

Taxes promote creativity (otherwise known as “cheating”)

By on February 1, 2013 in Creative, Fraud, Internal Revenue Service

William Meyers, 66, of Cottage Grove, Oregon, took the time to file more than 70 fake excise tax returns. He’ll now have 366 days in prison (and three years of supervised release, and 100 hours of community service) to mull over the consequences.

Meyers was sentenced in U.S. District Court, and ordered to pay more than $873,000 in restitution, for filing the false returns.

Oh, he was also operating an illegal still. Busy guy. You can find the whole story here, compliments of The Oregonian.

$2 million tax refund equals 66 months in prison

By on July 26, 2012 in Creative, Fraud

She could have been Turbotax‘s Poster Child For Getting Your Maximum Refund–”I used Turbotax and got a $2.1 million refund!”

The only problem is that there wasn’t much truthful about the Oregon tax return filed by Krystle Marie Reyes of Salem once you got to the lines below her name and the address where you could send her seven-figure refund.

Reyes pleaded guilty July 24 and was sentenced to 66 months in prison for tax evasion and felony theft.

The sentencing closes a case featuring someone who in recent years earned less than $15,000 annually, yet was able to get a refund of more than $2 million on a Visa debit card by filing a return showing more than $3 million in income. After she got the refund, she then reported losing the debit card twice, which finally got the attention of card issuer Intuit. (Hey, let’s put another link to our good friends at Turbotax right here.)

What’s still open, however, is how a return with such eye-popping numbers made it through the Oregon Department of Revenue. As Michelle Cole of The Oregonian, who has been all over this story, reported, four employees with the department were either demoted or subject to “disciplinary action” following an internal investigation. Names of the state employees involved were shielded under the rubric of “personnel” matters, and apparently no one is getting fired after the biggest tax fraud in state history.

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2.1 million reasons this tax-filer was very, very happy

By on June 9, 2012 in Creative, Fraud, Internal Revenue Service, Socialism in America, Tax Preparation

Every year at least one or two taxpayers I work with get asked by the state of Oregon to send copies of W-2s to verify tax withholding after a return has been filed. I always figured that was just part of the state’s efficient system ensuring that people requesting refunds were entitled to the money. After all, sometimes these clients have refunds of more than $5,000 coming back to them.

So imagine my surprise when reading in The Oregonian that someone filed a tax return with a $2.1 million state refund , and the full refund was approved and sent to the filer on a prepaid Visa debit card.

The state says Krystle Marie Reyes of Salem filed a return showing $3 million of earnings and $2.1 million of tax overpayments. The return went through, Reyes got a debit card with $2.1 million on it, and then she spent more than $150,000 between February and April.

It’s be nice if I could say here that dedicated government gumshoes working on behalf of honest Oregonian taxpayers (that $2 million ultimately comes out of the pockets of taxpayers) uncovered the problem. Alas, news reports say that the alleged fraud was uncovered only after Reyes reported that her debit card had been stolen.

Whoa–who loses a debit card with $1.9 million on it? Who loses a debit card with $1.9 million of ill-gotten funds on it and then reports the card lost or stolen??

But wait, it gets better–or worse: After being booked into jail, Reyes was released for “capacity reasons”, and is now supposed to appear in court July 5.

So what kind of complicated, esoteric strategy does the state say was used to generate a tax return producing a $2.1 million refund that flew right into the filer’s hands? Well, the return was filed using Turbotax .

Hmmm…let’s see what that link does for the company’s sales.

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