April 4th - California
Congratulations, you made it! Austin Lewis Managing Editor
You made it through another April Fools’ Day, that is, not another tax season. The IRS Commissioner must have seen his shadow during this Groundhog Day of a year because we still have six more weeks of filing returns ahead of us. To keep you entertained while you make that final push to the finish line, here are a few past pranks with a tax theme, from around the world.
IRS shares data with Nigerian prince: The nonprofit Tax Foundation’s 2016 prank detailing an IRS plan to outsource its data security came on the heels of two IRS data breaches involving the “Get Transcript” program and e-file PINs, which compromised the personal information of more than 800,000 taxpayers.
£2,030 refund for British taxpayers: In 1996, an advertisement appeared in The London Times which featured an apology from Britain’s Conservative Party and asked readers to contact party headquarters for a £2,030 tax refund. There was just one catch: The fake ad was paid for by members of the Labour Party.
Norway’s 10% tax rebate: Norway’s Aftenposten (The Evening Post) published an article claiming that taxpayers would have to file again due to a data company error. The 1971 article, which included a photo of a puzzled employee trying to make sense of a scrambled string of data tape, said anyone who re-filed by the end of the day would receive a 10% rebate. And to think, when the IRS has computer problems in 2018, they only offered a one-day extension. CPA’s fraud extends beyond his PPP loans Kathryn Zdan, EA Editorial Director
An Arizona self-appointed CPA is under the microscope for filing fraudulent PPP loan applications that netted him $1.2 million. But as authorities began to dig into this case, one of the likely numerous cases of PPP fraud, they found some other disturbing facts.1 The CPA, James Polzin, held himself out as specializing in ex-pat tax issues. But he left in his wake numerous unhappy clients, who said that after hiring him when they moved abroad, they later discovered that he had never filed any of their returns and now they owed significant tax bills in the U.S. and/or in the countries where they now live. In one case, the failure to file (and resulting three years of unpaid tax and penalties) is affecting the taxpayer’s wife’s application for naturalization in Germany. Another Arizona CPA reviewed one of the returns filed by Polzin and was so alarmed that he filed a complaint with the Arizona State Board of Accountancy. The ensuing investigation found that Polzin is not actually a CPA … he was just using the credentials that belong to one of his relatives. (The relative said Polzin apologized for impersonating him and told the relative he would not do it again.)
Polzin’s businesses appear to be shuttered, and his clients are left with a huge mess and no answers. They’ve formed a Facebook group to try to connect the dots and track him down; there are over 100 members.
The best of the worst Lynn Freer, EA President
Longest tax return: In 2011, General Electric filed a 57,000-page federal tax return.1 The return, which was filed electronically, would have been 19 feet high if printed out and stacked. Largest refund: In 2014, a Georgia woman filed a state income tax return that claimed a $94 million refund.2 The return was fraudulent, but Georgia revenue agents cut a check for $94,323,148 and told her to come on down to a bank inside a supermarket to cash it. She was arrested upon arrival. Largest tax debt: In 2007, telecommunications entrepreneur Walter Anderson was sentenced for failing to pay $200 million in taxes to the IRS.3 In 1996, he earned over $126 million, but his federal return showed $67,939 in income and he paid $495 in taxes. Largest tax fraud scheme: In 2020, Robert Brockman was charged with tax evasion, wire fraud, money laundering and other crimes as part of a nearly 20-year scheme to conceal around $2 billion in income from the IRS and defraud investors in software company Reynolds & Reynolds, of which he was the CEO.4 Longest tax season: After being extended to July 15, the 2020 filing season wins first place for longest tax season in history, followed by the 2021 filing season.