Kitsap Crime and Justice

Life’s only certainties, most of us know, are death and taxes. Yet around 1,000 people a year are prosecuted in the U.S. for “evading their income taxes, willfully failing to file tax returns, filing false tax returns in order to obtain inflated tax refunds and other such tax crimes,” explains Kenneth J. Hines, the IRS Special Agent in Charge for the Pacific Northwest.

Prior to April 15 — “tax day” this year — Hines has issued a memo to help you avoid losing your life savings. Or worse — having the tax man come for you.

Here are his main areas of concern, as emailed to me by Dan Wardlaw, another IRS special agent:

Tax Scams

“Fraudsters will try to convince you that there is no legal requirement to file a federal income tax return or to pay federal income taxes.  This is entirely untrue.  The federal courts have upheld the validity of the federal income tax laws for decades.  Approximately 1,000 people a year are prosecuted in this country for evading their income taxes, willfully failing to file tax returns, filing false tax returns in order to obtain inflated tax refunds and other such tax crimes.  Most tax return preparers are extremely honest; however, there are a fair number of tax return preparers who are prosecuted each year for preparing false tax returns for their clients.  In addition to jail time, tax cheats also have to pay the back taxes, along with interest and penalties,” Hines said.

Investment fraud

“Getting involved in an investment fraud scam, such as a Ponzi scheme, can lead to financial ruin.  If someone says that they can help you earn large rates of return on your investment, such as 2-4% a month, get a second opinion from a legal, tax, or investment professional.  All too frequently, such claims are based solely on trickery and deceit.  These fraudsters may simply pay “interest” to you from other victims’ invested money and then provide you with phony quarterly financial statements which they prepared.  What these fraudsters really want is to enjoy a lavish lifestyle with your money,” Hines wrote.

Money laundering schemes

“Money laundering is the conversion of illegal money into funds or assets that appear to have come from legitimate or clean sources.  Dirty money must be “laundered” in order for the criminal to use it.  Sources of dirty money include illegal drug sales, investment fraud, embezzlement, mortgage fraud, healthcare fraud, and dozens of other illegal activities.  Don’t let anyone talk you into laundering money for them.  It’s a crime and the criminal penalties can be severe – up to 20 years in prison,” Hines wrote.

Mortgage fraud

“In general, mortgage fraud involves lies made to a lender in order for a loan to be made that the lender would not otherwise approve.  Mortgage fraud can be committed by home buyers, appraisers, real estate agents, loan officers, account executives employed by the lenders and others.  Real estate transactions require legal documents which are usually signed under penalties of perjury.  Don’t jeopardize your good name, your credit or your freedom by being dishonest in a real estate transaction,” Hines wrote.

“Life is to be enjoyed to the fullest extent possible,” Hines concluded. “Don’t let that enjoyment be lost by either committing fraud or by being defrauded by others.”

More information can be found at the Internal Revenue Service’s web site.

Share on Facebook

This entry was posted on Saturday, April 11th, 2009 at 4:00 am by josh farley and is filed under Civil Justice, Crimefighting (News you can use), Financial Crime. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.