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Oregon's biggest tax fraud.

http://www.oregonlive.com/politics/index.ssf/2012/06/human_e...

A state computer red-flagged an allegedly fraudulent $2.1 million tax refund, but "human error" allowed the scam to slip through the Oregon Department of Revenue, a spokesman for the state agency said Thursday.

Department of Justice agents arrested Krystle Marie Reyes, of Salem, Wednesday on accusations that she used Turbo Tax computer software to file a fake tax return claiming she had earned $3 million and was owed a refund of $2.1 million. Oregon revenue officials approved the refund, and Turbo Tax issued Reyes, 25, a prepaid Visa debit card with the full refund amount on it.

She spent $200,000 between February and April before reporting the card stolen. At that point, state revenue officials "double-checked" the tax return, determined it was fraudulent and notified the Justice Department. Intuit, the company that owns Turbo Tax, has returned $1.9 million to the state... It's unclear what might have happened if Reyes had not lost the debit card.
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No fair -- I never got debit cards from TurboTax for my state tax refunds. Human error? What kind of human might think she could have overpaid her taxes by $1.8 million on an income of $3 million? Sheesh.

--fleg
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Wouldn't you think that if your picture was going to be all over the place you'd pause a moment to fix your makeup and hair? And smile, for Pete's sake!

One--and only one--thing I'll give John Edwards. He looked mahvelous in his mug shot.

Phil
Rule Your Retirement Home Fool
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Wouldn't you think that if your picture was going to be all over the place you'd pause a moment to fix your makeup and hair? And smile, for Pete's sake!

She doesn't look so bad compared to the average young urban Oregon woman:

http://www.dagbladet.no/dinside/2001/02/05/piercing.JPG

--fleg
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I wonder what the federal return said.

On a prepaid debit does Intuit have the money until Krystle used it?

Jean
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I wonder what the federal return said.
On a prepaid debit does Intuit have the money until Krystle used it?

Jean

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Actually, I think it's held by the bank that issues the debit card.
Which might be the State Bank of Santa Barbara.

I just say that, because that's who is (or was) the lender of Turbo Tax's Refund Anticipation Loans.

Tax preparers who buy the Turbo Tax Pro product (or whatever they call it now) find that if you want the Refund Anticipation Loan (RAL) option, the software box includes forms to sign up as a lending agent with the State Bank of Santa Barbara.

IMNSHO, the IRS' audit selection should be HIGHLY focused on the debit card refunds. Now, the reason they offer that option is to accomodate lower-income people who don't have bank accounts. But that's the same set of taxpayers who work with (or in collusion with) seasonal storefront preparers (with or without a national franchise name)who submit a lot of shady returns with a big Earned Income Credit refund.

Now, those aren't in the $2 million range. And I, too, would love to see what that return looked like.

Bill
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IMNSHO, the IRS' audit selection should be HIGHLY focused on the debit card refunds. Now, the reason they offer that option is to accomodate lower-income people who don't have bank accounts. But that's the same set of taxpayers who work with (or in collusion with) seasonal storefront preparers (with or without a national franchise name)who submit a lot of shady returns with a big Earned Income Credit refund.

And I, too, would love to see what that return looked like.

==================================

The return was her Oregon return. I'm guessing the IRS didn't let go of the refund so easily.
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The return was her Oregon return. I'm guessing the IRS didn't let go of the refund so easily.

I'm guessing the "copy" of the federal return that she enclosed with her Oregon return was not the same one that she actually sent to the feds.

--fleg
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I'm guessing the "copy" of the federal return that she enclosed with her Oregon return was not the same one that she actually sent to the feds.

--fleg

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Will Turbo Tax let you do that?

Of course, I'm assuming that the return had to be filed electronically in order to get the debit card. Maybe I'm wrong.

Jean
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Will Turbo Tax let you do that?

Of course, I'm assuming that the return had to be filed electronically in order to get the debit card. Maybe I'm wrong.


Maybe you can create two separate tax returns and efile the federal part of one and the state part of the other. I don't know if TT lets you do that, but it does let you create multiple returns.

--fleg
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Will Turbo Tax let you do that?

Of course, I'm assuming that the return had to be filed electronically in order to get the debit card. Maybe I'm wrong.

Jean


One would seem to be to tell Turbo Tax that you are filing a printed federal return and then efile the state.
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Will Turbo Tax let you do that? [file a state return that differs from the federal in amounts that should be reported identically]

You can prepare multiple returns in TT. Some states require you to simultaneously e-file your federal and state return, others will allow you to e-file the state return independently of the federal return. I don't know what OR's requirements are.

Ira
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There are two things that strike me about this (I watched the local news extended story):

1. This is an unsophisticated tax filer who did this with almost no forethought or deception planning. From the interview with her, she had trouble putting together complete sentences, as she was, with a straight face, claiming that she felt this was owed to her (I suppose this is a consequence of watching too much Obama speaching). So if she can do this for millions and get by with it, how many smarter filers are getting by on $10,000 false refund claims?

2. Do banks (or other asset holders) ever look at the size of the debit cards they are backing? Now, I know the more the better for them, as they get a cut of every purchase....but if it is fraudulant, they'll likely have to give up their margins plus the administrative costs. But I would reason that most of the high value debit cards are a few thousand dollars....but $1.8MM?? Whew!!

And had she not reported the remaining $1.6MM on the debit card as stolen, would the taxpayers have just lost this balance? Had she not lost the debit card, would she have consumed the entire amount with no one ever knowing?

BruceM
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This is an unsophisticated tax filer who did this with almost no forethought or deception planning. From the interview with her, she had trouble putting together complete sentences, as she was, with a straight face, claiming that she felt this was owed to her (I suppose this is a consequence of watching too much Obama speaching). So if she can do this for millions and get by with it, how many smarter filers are getting by on $10,000 false refund claims?
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NO WAY! Anybody who steals that much money has to be a Republican!

Bill
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Anybody who steals that much money has to be a Republican!

Jon Corzine is a Republican? Who knew?

--fleg
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