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Diane Dimond
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Tax Fraud From Behind Bars

Comment

At prisons across the country, all incoming mail is opened and checked for contraband before the prisoner ever receives it. What would be considered mail tampering on the outside is standard operating procedure in a prison.

Amazingly, however, outgoing prison mail is mostly just bundled up and shipped out via the U.S. Postal Service with no inspection. The only exception is if a particular prisoner is under suspicion for some sort of criminal activity.

That's a shame because this failure to monitor mail is the first weak link in a chain of inmate tax fraud that's been going on for years, according to government investigators. In just the 2009 tax year, for example, prisoner inspired IRS fraud cost you, me and every other taxpaying American at least $39 million.

How could this happen? How could a prisoner fake an income tax return from behind bars and have it go unnoticed? Many times, an outsider's bank account is used to launder the money — but many times, sizeable refund checks are deposited directly into prison bank accounts. Doesn't any official notice?

While the rest of us sweat to scrape up every W-9 or 1099 form, every receipt and all the corresponding documentation the IRS requires by the annual mid-April deadline, these incarcerated mooks are blatantly committing another criminal act — right under the noses of their guards.

A recent inspector general's audit of the problem revealed how state prisoners have been getting away with it. First, often using the prison library computer, the inmate steals a Social Security number. While surfing online, it's also pretty easy to locate a list of bankrupted businesses. The prisoner takes the name of one of them and lists it as their former employer on a 1040 form. Oh, and the form is also readily available online and simple for the prisoner to print out and fill out.

In this era of record business failures, it is nearly impossible for the IRS to track the truthfulness of every 1040 form that lists a bankrupted employer.

The federal audit also disclosed just how gutsy these inmates get. More than two dozen of them asked for and got $50,000 worth of federal tax credits for electric and other alternative fuel cars. Never mind that they couldn't drive a car if they wanted to! And the report concluded the $39 million fraud from 2009 was likely even larger because some 10,000 returns from prisoners were never scrutinized.

If the first weak link is the state prison system, which allows the fake tax forms to be mailed out unchallenged, the second overlooked failsafe has to be the IRS itself. The agency is sending out millions of dollars in undeserved tax refunds to convicts without so much as a double check of Social Security numbers or a second thought as to why a check would be going to a prison address in the first place. Apparently there's no built-in filter at the IRS to flag checks going to state prisons.

That's got to change!

In 2008, Congress finally got around to passing a law that allows the IRS to share information about suspicious tax returns with the federal Bureau of Prisons. To date, there's no law that allows the IRS to share with state prison officials. That's got to change, too — especially for the states of California, Florida, Georgia and others with the largest prison populations.

Some prisoners are brilliantly smart. Not smart enough to have stayed out of jail, mind you, but intelligent enough to use their abundance of free time to come up with all sorts of scams launched from their prison cells. Just because this IRS scam is getting some publicity now, that doesn't mean it's going to stop. With no way for the IRS and the state to legally communicate, I can just hear the sarcastic titters of the cons now: "What? I'm gonna get in trouble? What? Are they gonna put me in jail?"

It ticks me off that at a time when my family and so many others strain to cut corners and watch every penny, this fraud continues year after year with no apparent shift in government procedures to stop it.

Not long ago, I wrote here about how the Government Accountability Office had identified for Congress 30 areas in which — if they acted — multiple billions of dollars could be saved. Crooks bilking our Medicare and Medicaid systems, unnecessary military spending and people who simply haven't paid their taxes could be more enthusiastically pursued. So far, no action has been taken.

How's this for an idea? From this point forward — and for the rest of the year — how about Congress agrees to expeditiously take up each and every one of those 30 areas outlined by the independent GAO? And once those multiple billions of dollars is saved, can someone please offer a law that lets the IRS share information with state prison officials to stop prison IRS fraud?

Anybody out there with me?

Diane Dimond's book, "Cirque Du Salahi — Be Careful Who You Trust," can be ordered at Amazon.com. Visit Diane Dimond's official website at www.dianedimond.com for investigative reporting, polls and more. To find out more about Diane Dimond and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

COPYRIGHT 2011 CREATORS.COM



Comments

3 Comments | Post Comment
It's a low blow for a quality syndicator like Creators.com when a trash writer like Diane Dimond joins your roster. Diane Dimond is pure tabloid through and through. First, she's not a "modern day journalist," as she claims, having never graduated from an accredited university with a degree in journalism, including at least one credit in journalism ethics and media law.
Second, she has been caught time and time again in unadulterated lies. She spent the majority of her "career" covering Michael Jackson, who provided her with an opportunity to practice her fantasy writing while she made up pure drivel about him that anyone, even people not particularly supportive of Mr. Jackson, could see were pure inventions designed to elevate her status from hack writer to mainstream. Didn't work. Multi-millions of Jackson supporters are well aware of every single lie she told. She will never be able to wash the stink off herself for having compromised her integrity repeatedly in the quest for airtime and ratings.
Diane Dimond must face the fact that she'll NEVER be considered a quality writer. She did it to herself.
Comment: #1
Posted by: LibelFreeZone
Sun Mar 6, 2011 6:29 AM
It's a low blow for a quality syndicator like Creators.com when a trash writer like Diane Dimond joins your roster. Diane Dimond is pure tabloid through and through. First, she's not a "modern day journalist," as she claims, having never graduated from an accredited university with a degree in journalism, including at least one credit in journalism ethics and media law.
Second, she has been caught time and time again in unadulterated lies. She spent the majority of her "career" covering Michael Jackson, who provided her with an opportunity to practice her fantasy writing while she made up pure drivel about him that anyone, even people not particularly supportive of Mr. Jackson, could see were pure inventions designed to elevate her status from hack writer to mainstream. Didn't work. Multi-millions of Jackson supporters are well aware of every single lie she told. She will never be able to wash the stink off herself for having compromised her integrity repeatedly in the quest for airtime and ratings.
Diane Dimond must face the fact that she'll NEVER be considered a quality writer. She did it to herself.
Comment: #2
Posted by: LibelFreeZone
Sun Mar 6, 2011 6:29 AM
I am appalled that a respected community of writers would continue to allow a known yellow "journalist" to hold a place on their prestigious roster. Ms. Dimond has shown to be an unethical and unscrupulous tabloid reporter. She has never attended any accredited college. She has not taken any courses in journalism. If she had, she would have definitely taken a course on ethics in journalism which, obviously, she is not familiar with. Ms. Dimond is most noted for her questionable and biased reporting on only one story, that of the Michael Jackson Case. Many in the mainstream media have discredited her due to her reporting of false information and taking a pro-prosecution position in that case. Later it was discovered that the prosecutor was her friend.
Ms. Dimond was basically fired from the tabloid show "Hard Copy" due to humiliating herself with her fabrication of facts. That right there would be grounds enough not to have allowed her into your organization. Who gets fired from a tabloid show?
She claims she is an investigative reporter however her reporting tendencies are rooted in her own opinions and the twisting of facts for ratings and sensationalism. She has also made a fool of herself several times. One case in point was when she heard that a child made an accusation of child molestation against Mr. Jackson. Instead of calling the police, she traveled to Canada to get the "scoop" and taped what was supposedly confessions of the boys accusations. She was humiliated when it all turned out to be a scam. She was so determined to grab on to a juicy story that she did not protect the child by calling authorities. Irresponsible to say the least.
Most recently, she has made comments regarding the Conrad Murray trial in which she makes claims completely contradictory to the facts of Mr. Jackson's autopsy report. It appears that she has a peculiar obsession with Michael Jackson, which is aligned with the fact that she has built her career on her dubious coverage of the pop star.
Her antics and scandals have been legendary, and, therefore, she does not deserve to hold a place in your organization. Creators Syndicate specifically describes itself as "an international syndication company that represents cartoonists and columnists of the highest caliber." Ms. Dimond simply does not fit this description. I do hope that Creator's Syndicate is not just another media source that has gone tabloid. What a shame if that were true.
In addition, I find it particularly distasteful that she continues to push the sales of her sensationalistic books at the end of her column.
Comment: #3
Posted by: VeteranTeacher
Sun Mar 6, 2011 8:20 PM
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