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IRS Employee Stole Data To Forge $8M In Fraudulent Returns
coondoggie writes "A former Internal Revenue Service employee this week got 105 months in prison for pleading guilty to theft of government property and aggravated identity theft in a case where the guy tried to get away with nearly $8 million in fraudulent tax returns. The U.S. Department of Justice said Thomas Richardson used his inside knowledge of IRS operations to commit his crime, which was pretty audacious. According to the DOJ, Richardson admitted that within a two-day period, April 15 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns totaling $7,922,657."
In America...
you tax IRS!
The real "Libtards" are the Libertarians!
Crucify him!
They don't just try to cheat us, they try to cheat each other!
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
I bet he won't be punished NEARLY as bad as the megaupload guy. Such bullshit.
Why is it that you so rarely hear about crimes where the feds haven't been able to actually figure out who actually did it?
File under 'M' for 'Manic ranting'
According to the DOJ, Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson's bank accounts.
I imagine a red flag was automatically triggered by the 58 returns going to one bank account. As a side note, I know people who write code for the Federal government that checks for irregularities like this and they do that for a living 40 hours a week, so if you're going to try to scam the IRS you have to be at least a little clever.
So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?
Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)
I work for the Department of Redundancy Department.
What this agent did was actually a minor correction of the fraud and crime that IRS is involved with on the daily basis.
You can't handle the truth.
and the problem is?
Wow. That's like... four illegal downloads!
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
How is that especially an opportunity? Do you have any idea how many people actually get audited in a year? 58 more is completely inconsequential.
File under 'M' for 'Manic ranting'
Glad to see /. sticking to their slogan of "news for nerds".
Hypothetical, say you are a criminal, but want to avoid the fate of Al Capone and get busted for not paying your taxes. Can you use the capital gains rate if you have some sort of fraud that takes more than a year for the payoff?
The best would be some sort of crime that pays off after the statute of limitations, and you only have to pay the lower capital gains rate. Win Win Win!
This issue is a bit more complicated than you think.
TFA says all 58 returns directed money be deposited into one of the guy's bank accounts. Derp
Say they stopped at $6 million. That is enough to get a new false identity or move to a country without extradition. After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.
Only the State obtains its revenue by coercion. - Murray Rothbard
1. a lot of financial institutions would rather not it be public knowledge that they have problems in their security systems, etc. they try to hush things up without getting the cops involved.
2. the cops sometimes will collude with them to hush things up. see 'The Asylum' by Leah McGrath Goodman and NYMEX (yes, NYMEX from Trading Places)
3. at the highest echelon, the notion of what is legal and illegal gets distorted and fooled with, by lobbyists, payed-for intellectuals, and the super rich. so that to date there has been little-to-no prosecution of the people in the CDO, mortgage securities, robo signing, foreclosure fraud, and housing bubble system. experts and authors like Roger Lowenstein spill buckets of ink trying to prove that no crime took place, even though 2 trillion dollars magically disappeared into hedge funds and investment banks offshore accounts in 2008, with the help of the taxpayer.
4. take number 3 and just ... multiply it. well. did you know, for example, that the guy who ran Nymex was, directly before he ran Nymex, the head government regulator of Nymex? And that he let Nymex do stuff that it shouldn't have been doing, and then they hired him out of his government job and gave him a huge raise? there are thousands of cases like that that never receive media attention.
in other words, people DO get away with that sort of thing, all the time.
and the best way to get away with it is to have something like 'CEO' or 'Board Chairman' on your resume.
Not bad, it would seem white collar crime really does pay.
I think it's cool that we actually caught one!
For in politics, as in religion, it is equally absurd to aim at making proselytes by fire and sword. - Publius
Thomas Richardson was quoted as saying:
"I must have put a decimal point in the wrong place or something. Shit. I always do that. I always mess up some mundane detail."
If thou see a fair woman pay court to her, for thus thou wilt obtain love
...isn't that implicit approval that what you did was legal?
No, that's implicit approval that you didn't also commit tax evasion.
The rulings are pretty self-consistent. You can even deduct the expenses for your illegal business:
"While embezzlers, thieves, and the like are forced to report their ill-gotten gains as income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933.[7] The taxpayer subsequently tried to deduct from his gross income the legal fees he spent while defending himself.[8] The Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of 162(a).[9], which allows the taxpayer to deduct all the “ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.”[10] The Court reasoned (and the Internal Revenue Service did not contest the point) that it was ordinary and necessary for a person engaged in a business to expect to have legal fees associated with that business, even though such things may only happen once in a lifetime.[11] Therefore, the taxpayer in Tellier was allowed to deduct his legal fees from his gross income, even though he incurred the fees because of his crime. The Tellier court reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[12] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct.[13]" -- https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States
Nuggets of information like this are why i still like to read Slashdot. Thanks!
One CPU cycle wasted on digital restrictions management is ONE TOO MANY.
First, the oft-touted "47% of tax units pay no income taxes" statistic is wrong. 47% of tax units may not pay the Federal Income Tax, but any of them with any wage income at all DO pay the Federal Payroll Tax of 15.3% on every dollar earned up to about $100k. That's a tax on income.
That's a higher tax rate than the very wealthy pay on their investment / dividend / carried interest income.
As a matter of fact, I personally pay a federal tax rate of about 29%, double the tax rate paid by Mitt Romney.
Most people advocating replacing the Federal Income Tax with a "flat" tax are really advocating HUGE tax breaks for the rich, because they're still going to charge anyone who dares to work for a living the new "flat" tax *AND* the 15.3% payroll tax which they're not going to pay.
Even better are those who argue for a 0% capital gains and dividend tax (Newt, Ron Paul), who don't want the wealthy to pay ANY TAXES AT ALL!
paintball
OK, so you hate people who've risked money making investments. We get that. But do you really think everyone else is so stupid to think you're saying anything of substance? Roughly 50% of the population earns money below the rate that the Congress has set as meaning they owe incomes taxes, and many of them receive "refunds" on money they don't even pay. They don't pay income taxes, they pay negative income taxes. A small number of rich people pay the vast majority of the country's income taxes, and middle class people pay the bits that are left over. The other half of people pay none. Of course you know that, and you're a troll.
That 50% figure is dramatically misleading. First, it includes things like high school and college students who work part time and earn a pittance. And it also includes retirees who are not in the workforce. You can argue that even those people should pay income taxes, but the perception of a permanent 50% underclass that never pays taxes is absurd. Most taxpayers will not pay income taxes at both the start of their career and after retirement. I can't find the cite now, but I remember reading that simple demographics accounts for roughly 35% of the people who pay no income taxes.
And lets not forget that for many people, payroll taxes are a bigger bite than income taxes - 7.4% starting on the first dollar you make, with no exemption or deductions. For rich people the payroll tax is not a significant factor, since social security taxes stop after $109K.
You're pretending that he didn't already pay the higher income tax rate on the money he earned and then risked in the investments that, if/when then make money, are once again taxed at the capital gains rate.
Mitt Romney NEVER paid the higher income tax rate. His initial earnings were as carried interest paid at the capital gains rate; he NEVER paid the regular income tax rate on those earnings.
So, first problem, you're wrong.
Second problem:
If "putting your money at risk" for some reason deserved a lower tax rate, why aren't gambling and lottery winnings taxed at the capital gains rate instead of the income tax rate? After all, the money spent on the lottery ticket was ALREADY taxed once, right?
Further, why does income from wages have a special tax that income from other sources doesn't?
paintball