Diamonds in the Fraud

There’s a new theory in the world of tax fraud promoters: Redemption. Joe Kristan had a post last week on some Kansas City fraudsters who used this method. The “idea” behind this is (as best as I can determine) that the federal government is holding money for you and all you have to do is send in various paperwork to get it.

The fraud in question was not confined to Kansas City. From Detroit comes the news of Diamond Tax Services. Damian Jackson, his wife Holly, and Tammy Daniels, are accused of promoting a tax fraud scheme. Mr. Jackson, a minister at a Detroit area church, used phony Form 1099-OID to obtain over $1.6 million in fraudulent refunds. The Department of Justice has asked a federal court to issue an injunction barring the three from preparing federal tax returns to others.

There may be a criminal prosecution in their future, too. The press release accuses the Jacksons of claiming $2.5 million in phony refunds on their tax returns. Those kinds of numbers tend to get IRS criminal investigation quite interested.

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