How to get $100k IRS refunds without those fancy tax strategies

[Michael Plaks]

Hey, BP tribe,

I stumbled upon a truly fascinating recent court case: https://www.leagle.com/decisio...

The case itself was devoted to a rather technical issue known as innocent spouse relief. Basically, the IRS was trying to collect from a divorced elderly woman the debt based on the joint returns she filed with her ex-husband. The twists of the case are hardly interesting for anybody except us tax professionals. What is interesting for everybody is what her ex-husband had been doing for OVER 10 YEARS (!!) until the IRS finally woke up on his shenanigans.

The scam was brilliantly simple. He was filing tax returns showing, let's say $50k in taxes due. He then claimed that he had $200k of taxes withheld from his W2s or 1099s and requested a $150k "refund."  And, believe it or not, the IRS kept sending him these 6-figure "refund checks" every single year. He received over $1M of completely bogus IRS refunds in total.

When the IRS criminal investigators finally caught up with him, the Orlando US Attorney's office declined to prosecute this upstanding citizen who, by the way, also engaged in other honorable activities such as physical abuse of his son and stealing from his late mother's estate.

Telling y'all, we need to learn to work smarter, not harder.