SALT LAKE CITY (ABC 4 News) - Is it fraud? Not enough regulation by the IRS? How could this happen? ABC 4 News wanted to find out why your tax dollars are being given away.
The lure of getting easy money is sometimes too tempting to ignore, especially when the cash is coming from Uncle Sam.
Children can bring in big bucks during tax season but some people are taking dependent deductions to another level.
“Sometimes they count people they don't even know,” said a man we’ll call “Tom”.
We're concealing this man's identity because “Tom” tells me he did it and there's many more who are cheating the government.
“Come tax day everybody is talking about their dependents and stuff like that,” said “Tom” “everybody is doing the same thing so I thought I was doing the right thing,” he continued.
“Tom" claims he had no idea listing nephews or nieces or cousins that did not live with him was illegal.
“I went to this office in Kearns and I was relying on their expertise,” said “Tom”.
For 10 years, he took his forms to a tax preparer and just signed on the dotted line.
“You're signing it but you still don't know if it's right or wrong,” said “Tom”.
He found out what he was doing was wrong. "Tom" is a lawful permanent resident in the United States but trouble with the law threatened his immigration status.
So, he had to show his tax returns.
“I had talked to my lawyer and he had told me they were done wrong,” said “Tom”.
Immigration attorney Brian Lofgren tells us it happens all the time.
“And I know it's a much bigger issue than any of us know,” said Lofgren.
He's seen as many as ten people put down as dependents.
That gives the taxpayer about a thousand dollar per person refund from the government.
Basically making them not have to pay any taxes.
But Lofgren says "Tom" is innocent.
“They really don't know that anything wrong has been done on their tax forms, such as claiming dependents they shouldn't claim,” said Lofgren.
He blames non-certified small shops where employees claim to be tax preparers.
The businesses collect a check for doing your taxes correctly or not.
Lofgren tells his clients to see a certified public accountant and amend their taxes for every year they got a wrongful return.
“If they don't amend, it’s probably going to go very badly for the person when it comes to the final hearing on their immigration,” said Lofgren.
Tom is in that process right now.
“Between the federal and the state it's going to average about $40,000 that I have to pay back,” said “Tom”
That is the total amount for what he got over the 10 year period his taxes were filled incorrectly.
“I just want to do things right. Get it over with because I don't want it to come back from me 15, 20 years from now,” said “Tom”.
Still, the government knows it happens and it costs taxpayers billions of dollars each year.
But when we went to the IRS about it they sent us this response: “'no comment' in regards to the tax question”.
But regardless of comment from the IRS or how many times we ask him, “Tom" says he didn't know the thousands of dollars he was getting from the government weren’t his to take.
“What do you say to those people who say ‘he did this on purpose’, ‘He knew what he was doing',” ABC 4 asked.
“Well I wasn't aware of it, if I was I wouldn't have done it,” said Tom.
The IRS did tell us there is over 5,000 tax professionals in Utah that need to renew their preparer tax identification number for 2013.
Anyone who is a paid preparer must register with the government.