Tax season may bring with it thoughts of boring paperwork and stern accountants going through your filings line by line, but the IRS also sees its fair share of tax fraud taking place — and some of the attempts are truly bizarre.
For example, many taxpayers believe that filing a tax return is voluntary, or that paying federal income taxes is voluntary, and therefore try to use this excuse to avoid legal obligations.
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Not only does the IRS explicitly call both of these arguments or excuses inherently frivolous, but when using these excuses to avoid filing or paying taxes, the perpetrators may face extremely severe financial penalties as a result.
Now, let’s look at more bizarre examples of attempted deception or tax fraud involving the IRS.
A struggling Pittsburgh furniture store owner will receive a $500,000 insurance payout after he turned to a paid arsonist to burn his store to the ground, CBS News reports. However, when filing his taxes, the business owner attempted to add as a deduction the $10,000 “consulting fee” he paid the arsonist.
surprise! But that didn’t work, neither the tax write-off nor the insurance payout was approved. It’s unclear whether criminal charges will result.
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During the Cold War, a man built a fully equipped underground shelter to prepare for a potential nuclear conflict. On his annual income tax return, he attempted to deduct the related expenses as “preventive medication expenses.” This also didn’t work out, leaving our preppers with the entire bill.
As part of Minnesota’s larger Feed Our Future scandal, Abdiaziz Shafii Farah — a co-owner of Empire Cuisine & Market in early 2020, when this case began — joined the federal child nutrition program as COVID-19 spread.
According to the IRS Enforcement Division of Criminal Investigations, over the next several years, Farah and co-conspirators submitted fraudulent meal counts, with many names on the roster that were clearly false (such as “Serious Questions” and “British Meloni”). Ultimately, he was sentenced to 28 years in prison and ordered to pay nearly $48 million in restitution for his role in the $300 million fraud.