The IRS currently has nearly 90,000 employees — about the population of Springfield, OH, or Muncie, IN. The vast majority of them are honest, hardworking civil servants, doing their best to navigate the all-you-can-eat buffet of confusion known as "the Internal Revenue Code." They use their training and knowledge to do their sometimes thankless jobs, then head home to their families, secure in knowing they're helping our government finance its operations. But a tiny number of these so-called "servants" use their powers for evil instead of good. They cheat the system to enrich themselves, at the expense of all the rest of us. Fortunately, for those of us who play by the rules, they usually leave tracks behind them. Here's one of the better stories, from the IRS Criminal Investigations unit's Fiscal 2013 annual report. Patricia Fountain had worked at the IRS Service Center in Philadelphia for 10 years. In 2006, she discovered the IRS wasn't verifying requests for the telephone tax credit from filers claiming less than $1,500. Then she learned the Service wasn't verifying claims for first-time homebuyer credits. She smelled opportunity — and launched a criminal scheme of such dazzling brilliance that . . . well, we'll let you be the judge. First, she enlisted her boyfriend, her hairdresser, and a third friend to join her scheme. According to the Philadelphia Inquirer, the four conspirators then recruited a motley collection of "drug addicts, welfare recipients, and ex-cons" who needed cash, would let the gang file false returns on their behalf, and would hand over $400 of the resulting fraudulent refunds. Fountain's henchmen used her position within the IRS to "add an air of credibility" to the scheme and convince the straw filers to join. And life was good, at least for awhile. From 2006 through 2012, our criminal masterminds bilked the government out of more than $3 million. And how could Fountain count on her straw filers to cooperate and kick back her $400? If she didn't think they were coughing up her share fast enough, she would "red flag" them by filing another return, triggering the IRS to seek repayment and unleashing the collections department on them. (Yes, she actually did this — eight times!) Fountain's vindictive streak proved to be her undoing — predictably, one of the women she "red flagged" ratted her out. Things fell apart from there, with conspirators pointing fingers at each other in a mad rush to avoid consequences. Fountain claimed she was framed by her boyfriend, then had a hard time explaining her fingerprint on the stamp used to mail her own fraudulent return. Another co-conspirator — a Mensa wannabe by the name of Calvin Johnson, Jr. — used information from the scheme to continue filing false returns as late as 2012, while he was being supervised on pretrial release for filing his first batch of fraudulent returns! Fountain will have the next 19 years to decide if orange really is the new black, plus $1.7 million in restitution. Her boyfriend got 12 years behind bars and $1.75 million in restitution. Johnson gets 18 years of federal hospitality. And four more of the gang, including Johnson's father, drew sentences for their parts as well. It's all pretty comical, yes. But in the end it's more sad than funny. There are so many honest ways to make a good living, and so many honest ways to pay less tax on it. So call us when you're ready for a plan — because, in the end, it's what you keep that counts.

stevesharp, Author at MONEY & CLARITY

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So far stevesharp has created 12 blog entries.

Inside Job

The IRS currently has nearly 90,000 employees — about the population of Springfield, OH, or Muncie, IN. The vast majority of them are honest, hardworking civil servants, doing their best to navigate the all-you-can-eat buffet of confusion known as "the Internal Revenue Code." They use their training and knowledge to do their sometimes thankless [...]

By stevesharp|2014-07-09T12:09:45+00:00July 9th, 2014|Uncategorized|0 Comments

It Doesn’t Know You From Adam

The conversation usually goes something like this: Me: I see you have all of your money in your employer’s stock. Does that concern you? Him: No, not really, it’s done extremely well the past 20 years. Me: And therefore you feel it is logical to assume the next 20 years will be like the [...]

By stevesharp|2014-07-07T17:23:25+00:00July 7th, 2014|Weekly Update|0 Comments

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