Democratic senators tout agreement on prisoner tax fraud

An inspector general report released in January found that prisoners had been issued at least $123 million in false federal returns between 2004 and 2009. The two federal agencies came to an agreement on the issue after a push started by Sen. Sherrod BrownSherrod Campbell BrownDems plan to make gun control an issue in Nevada Mandel leads GOP primary for Ohio Senate seat: internal poll Red-state Dems need more from Trump before tax embrace MORE (D-Ohio) and other Senate Democrats. 

In a statement, Brown called the agreement “a long-overdue, common-sense solution.”

“Government agencies need to work together to prevent tax fraud wherever it occurs, but especially when we're being bilked from behind bars,” Brown said. 

Sens. Charles SchumerCharles (Chuck) Ellis SchumerOvernight Health Care: Schumer calls for tying ObamaCare fix to children's health insurance | Puerto Rico's water woes worsen | Dems plead for nursing home residents' right to sue Crying on TV doesn't qualify Kimmel to set nation's gun agenda Trump knocks ‘fake’ news coverage of his trip to Puerto Rico MORE (D-N.Y.), Bill NelsonClarence (Bill) William NelsonSenate panel approves bill to speed up driverless cars Dems plan to make gun control an issue in Nevada Overnight Cybersecurity: Trump proclaims 'Cybersecurity Awareness Month' | Equifax missed chance to patch security flaw | Lawmakers await ex-CEO's testimony | SEC hack exposed personal data MORE (D-Fla.) and Amy KlobucharAmy Jean KlobucharFacebook shifts strategy under lawmaker pressure Competition law has no place raising prices some say are ‘too low’ CNN to host town hall featuring Nancy Pelosi MORE (D-Minn.) also praised the agreement.

According to a spokesman from the Bureau of Prisons, the memorandum of understanding between the two agencies will basically help with the enforcement of a 2008 law that allows the IRS to give prisoner tax return information to the prison bureau. (That law was later amended to include state corrections departments.)

The Treasury Department’s inspector general for tax administration found in a report that the IRS was not fully utilizing powers given to it in that measure and that no information had been shared on either the federal or state level. The audit also found that prisoners had falsely claimed close to $300 million in 2009, more than four times as much as in 2004. 

Michelle Eldridge, a spokeswoman for the IRS, said in a statement that the agency “is committed to enhancing its processes to further minimize prisoner refund fraud. We believe the agreement signed with the Bureau of Prisons will help us accomplish that.”

The new federal accord should lead to similar contracts between the IRS and state prison authorities, according to the group of Democratic senators. 

The senators’ release also said that federal prisoners have been able to file false returns by using fake names and Social Security numbers, then having refunds sent to a third party. In state facilities, prisoners have had the ability to file fraudulent returns under their own name.