Tax return fraud

There’s a massive problem of criminals filling out false electronic tax returns so they can claim a refund and get the refund on a prepaid debit card. All you need is someone’s social security number, which is stolen from various organizations like schools and healthcare providers which use them.

The obvious solution to the problem was found in a NY Times comment:

Just like with EBT food stamp cards which can be traded around and easily used for fraudulent purposes, the Democrats insist of debit card tax refunds because they claim to be concerned about people without bank accounts. News flash: People without bank accounts don't pay taxes and shouldn't get refunds! But of course there are the welfare checks known as Earned Income Tax Credit that Dems want to give to their constituents. So Dems then say you need debit cards to give these people money because they don't have bank accounts. And the fraud follows.

Solution: send tax refunds only to an American, identifiable bank account with the taxpayer's name on it. Problem solved. But, of course, Dems prefer fraud when weighed against the possibility of any limitation on the ease of welfare payments. Just an ancillary result of government dependency programs that hurt all law-abiding taxpayers. As long as these debit card refunds exist, there is no solution. How many billions are you willing to pay criminals (and subsidize their crime gangs) in the name of political correctness?

Yes, tax return fraud turns out to be another problem created by political correctness and Democrats.

Comments

[Maximus Aurelius]

The point above is well taken, but you fail to identify the fact that these programs are also massive sources of corporate welfare at the state level. The mega-banks (BAC, Chase, others) may receive lucrative state government contracts to administer these programs. They may also be allowed to keep the interest earned on taxpayer refunds. They may also be allowed to chisel individuals with the typical array of fees associated with pre-paid debit cards.

While fraud is clearly the more insidious and costly issue here, campaign contributions to both democrats AND republicans from the banking lobby will ensure the pre-paid debit card will become further entrenched as a permanent feature of our system of taxation.

[superdestroyer]

As taxes begin to head upward again and as the U.S becomes a one-party-state, everyone should anticipate increasing tax fraud. My guess is that in a couple of years, it will be impossible to pay a handyman or tradesman with a check or credit card. They will all insist on cash.

[Steve]

The comment you point out is very good HS. The "refunds" we are talking about here are not really refunds at all. They are welfare payments. You hear a lot about how only 50% of us pay federal income taxes. Beyond that though, for millions of people, the Earned Income Tax Credit makes the effective tax rate negative.

[Peter]

Back in the 1990's there was massive fraud involving the Earned Income Tax Credit. It became fashionable for college students to claim to have children that didn't actually exist in order to get EITC refunds. This practice diminished when the IRS began requiring social security numbers for the children used as the basis for EITC claims, but never fully disappeared.

[John]

The Republicans have been big supporters of the Earned Income Tax Credit over the years. You can't blame this one entirely on the Democrats.