An article in USA Today claims that prison inmates in Georgia, Florida, California and elsewhere caused the Internal Revenue Service to issue $39 million in undeserved federal tax refunds in 2009. Georgia came in second with $3,560,562 in fraudulent refunds issued to prisoners, but was far outstripped by Florida’s $12,576,944 in refunds. The IRS identified 44,944 false or fraudulent tax returns filed by prisoners in 2009, however an audit identified 54,410 tax returns which the IRS had failed to identify as having been filed by prisoners.The number of undeserved refunds paid out was up from $13.4 million in 2004.
While some inmates came legally receive income from investments, inheritances and other sources, the false tax returns are typically based on fictitious jobs and taxes that were never withheld. Although inmates do work in prison, prison jobs do not pay enough to trigger withholding. The scams often involve the theft of Social Security Numbers and other information from others. In some cases, the inmates will find the names of businesses which have declared bankruptcy, in order to make it more difficult for the IRS to verify the claims.
A Florida inmate, Danilo Suarez, obtained $58,022 in tax refunds by filing 14 or more false tax returns. Jeanni Renee Hillin, a Tennessee inmate, received $58,651 in refunds in 2006.