I recently read an article about someone whose tax fraud schemes finally caught up to him. The news item was reported in the Wall Street Journal as part 3 of a 3 part article.

The title – “The Case for Becoming Your Mom’s Banker” would have thrown most people off of the scent but my tax-nose sniffed past the first two parts of the article (one of which was related to the title) and discovered this buried news item about tax fraud.

It seems that a gentleman in California named Haroon Amin was recently caught for his tax fraud: Between 2002 and 2003, he created 250 tax returns using the identities of people who had passed away along with some falsified W-2 forms. The IRS rejected most of his claims.

That should make us happy but here’s where I get upset:

The IRS may have rejected most of Amin’s claims but they still paid out about $2 million in refunds to banks in Armenia and Pakistan. Amin was caught, charged, and sentenced. Unfortunately, he will only serve a maximum of five years and he must pay a maximum of $250,000 in fines.

Maybe the IRS needs to break out the calculators that are busy calculating tax forms to make sure that the average American is paying what they owe and instead focus on getting all of their money back from this guy.

The news report didn’t say whether or not all of the money was returned, and I’m not an expert in international banking, but I seriously doubt that banks in Armenia and Pakistan are forthcoming with the money owed.

I realize that the IRS is extra busy during tax season as they process returns, perform audits, and somewhere in there weed out fraud. But there HAS to be a better process than this, which doesn’t seem to recoup the losses incurred by tax payers for one tax fraudster.

Source: The full article is here (although you’ll need to scroll down about two-thirds into the article).