How Long of a Prison Sentence Can Someone Face for Tax Fraud?

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As many tax controversy attorneys can state, tax problems can lead to major issues including a tax audit and even criminal tax charges. Even though tax problems are typically serious matters there are certain tax crimes that stand out even among serious offenses. Tax Evasion and tax fraud involving the use of stolen identities and stolen personal information is not only one of those crimes that can be punished particularly severely, it is also a major enforcement focus for both the Department Of Justice and the IRS. Taxpayers facing tax fraud or tax evasion charges should consult a tax lawyer before admitting anything to federal agents or prior to taking any action on the tax problem.

Queen of Tax Fraud Likely to Spend Decades in Prison
In a widely-reported tax conviction, Rashia Wilson was sentenced to more than two decades in prison due to her part in an identity theft and tax fraud scheme. While tax sentences are often harsh, this sentence stood apart in severity perhaps due to her other weapons charges, and her apparent propensity to brag and challenge law enforcement officials over social media. In one online posting, Ms. Wilson wrote:

“I’M RASHIA, THE QUEEN OF IRS TAX FRAUD… I’m a millionaire for the record, so if U think indicting me will B easy it won’t, I promise you! U need more than black and white to hold me down N that’s to da rat who went N told, as if 1st lady don’t have da TPD under her spell. I run Tampa right now.”

However, law enforcement officials were undeterred by these remarks and as part of “Operation Rainmaker”, they identified, arrested and charged Ms. Wilson and others. Also contributing to Ms. Wilson’s harsh sentence was her more than 40 previous arrests. Ms. Wilson appealed her sentence of 21 years, but to no avail. Ms. Wilson is currently serving her time at the Aliceville Federal Correctional Institute in Alabama.

27 Year Tax Fraud Sentence Shows the Severe Consequences of a Tax Charge
Ms. Wilson is not alone in having received a harsh sentence. James Lee Cobb III, also engaged in a scheme in which he claimed income tax refunds intended for other taxpayers. Mr. Cobb pleaded guilty to collecting more than 7,000 Social Security numbers that he then used to fraudulently obtain tax refunds. In all, Mr. Cobb admitted to stealing at least $1.8 million in tax refunds. For his crimes Mr. Cobb was sentenced to 27 years in prison.

Stolen Identity Return Fraud is a Major Tax Enforcement Focus
Both of the individuals discussed about engaged in the same type of fraud: Stolen Identity Return Fraud (SIRF). SIRF is a major tax enforcement priority not only because it is a major crime engaged in by both petty crooks and international criminal organizations. Left unchecked, this problem has the potential to disrupt the orderly administration of the U.S. Tax Code. In its most basic permutation, SIRF crimes involve the use of stolen personal identifiers to obtain a fraudulent tax refund. Typically the perpetrator of the fraud will file the fraudulent return early in the tax season when there is a high likelihood that the real taxpayer has not yet filed. The perpetrator of the fraud then directs the refund to a mailbox he or she controls or can access. Alternatively, the individual may use an electronic funds transfer to another account.

SIRF is widespread. The Department of Justice believes that from May 2008 to May 2012, more than 550,000 taxpayers had their identity stolen for use in SIRF. However, the DOJ touts significant success in combating this problem. Aside from the convictions discussed above, the DOJ has also secured convictions or guilty pleas in recent tax matters including:

  • May 11, 2015– The DOJ issued a press release regarding the guilty plea of a Raleigh, South Carolina man who used others’ Social Security numbers along with false information to obtain tax refunds.
  • May 12, 2015– A D.C. man was sentenced to more than three years in prison for his role in a SIRF scheme. More than $1.1 million in fraudulent refunds were requested.
  • June 1, 2015– After federal agents charged Alabama woman Teresa Floyd, she admitted her guilt as part of a SIRF scheme. Floyd faces up to two years in prison for aggravated identity theft charges and up to 10 years for the conspiracy charges. She also faces significant monetary penalties.

SIRF may be a major problem, but federal investigators from the IRS and DOJ have taken notice and are cracking down. The Brager Tax Law Group is dedicated to assisting taxpayers facing serious tax problems and tax charges. We can provide strategic advocacy for taxpayers charged with serious tax crimes. To schedule a reduced-rate tax consultation call us at 800-380-TAX-LITIGATOR today or contact us online.

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