WASHINGTON (Reuters) - U.S. authorities have filed lawsuits nationwide against promoters of schemes to help tax protesters collectively attempt to get fraudulent refunds of $562 million, the U.S. Justice Department said on Wednesday.
The schemes, under which almost $3.3 trillion in false claims have been made, involve hawkers of plans to help Americans get bogus refunds using false tax forms, underreporting of income and other strategies. Use of the schemes has grown in recent months, according to officials.
The government filed cases against seven individuals and their associated entities over the schemes this week.
The scheme promotes a theory among those claiming they don’t own taxes known as “redemption” or “commercial redemption,” which claims that the Treasury maintains a secret account for each taxpayer worth millions.
“The scope of the misconduct alleged in these lawsuits is staggering,” said John DiCicco, acting assistant Attorney General for the Justice Department’s tax division.
Those taking part may face penalties of up to 20 percent of the false claim, criminal prosecution and possible prison.
“It seems very, very simple. They show withholding equals the amount of their income and they file a tax return claiming a fairly large refund,” Faris Fink, a deputy commissioner at the Internal Revenue Service, said earlier this week.
“It is one that has gotten quite a bit of attention within the service,” he said, adding the schemes were bypassing IRS computer filters and “there were some refunds that leaked out.”
Editing by James Dalgleish