NEW YORK—Just because they’re already behind bars doesn’t mean they aren’t making out like bandits.
Prisoner tax fraud has ballooned in recent years. In 2010, more than 91,000 inmate returns claimed $758 million in fraudulent refunds, a new audit from the Treasury Inspector General for Tax Administration finds. That’s more than double the previous year.
While the IRS stopped the vast majority of fraudulent refunds from actually getting into the hands of prisoners, $35 million still slipped through the cracks.