CONSUMER CORNER: Be Aware of the Tax Refund Scam

Criminal Tax Fraud in Middle Tennessee

by Alan Marx

Hopefully by now you have finished and filed your income taxes.  In the past you could relax and, if you were lucky, just wait for your refund to arrive.  Ah, but that was in the past.  Now you may have unwelcome company and a long wait for that check.  As reported below, crooks may also be waiting for your refund.

This year, as in past years, the IRS issued warnings about scammers filing false claims for tax refunds.  Instances of this type of activity are widespread.  The good news is that sometimes the culprits get caught.

On April 21, 2015, the Nashville Business Journal reported that four men were arrested in Madison, Tennessee, for tax fraud.  Federal agents arrested Byron Fernandez-Virula, Sr., Byron Fernandez-Virula, Jr., Wilmar Soto-Virula, and Victor Oliva in connection with an alleged scheme to obtain millions of dollars in false refunds through a tax return business.  The criminal complaint said the returns included false W-2s, wages, and withholding tax information, fraudulent claims for dependents, and false taxpayer names.  Many of the participants in the scheme were confirmed to be illegal aliens.  Additional charges included immigration and firearms violations.  The investigation led to the arrest and conviction of more than 25 participants.

According to the Nashville U.S. Attorney’s office, 10 search warrants were executed on April 15 at locations that included Soto’s Income Tax Service in Madison, Soto’s Services 2 in Hermitage, Soto’s Income Tax in Springfield, Soto Services 1 in Gallatin and S’ Income Tax Services in Nashville.

Approximately $500,000 in cash was seized from the elder Fernandez-Virula.  Searchers also found information showing that he owned more than 15 residential properties worth in total more than $1 million.

The U. S. Attorney’s office said the case was jointly investigated with the Internal Revenue Service - Criminal Investigations, Homeland Security Investigations, and the U.S. Postal Inspection Service.  The case is being prosecuted by Assistant U.S. Attorney Hilliard Hester.

If you are lucky enough to get a tax refund, the last thing you want is to have it stolen by crooks.  Before you get the situation resolved, you will encounter a great deal of trouble and delay.  The IRS takes time to verify you are who you say you are before it will issue a refund in these situations.