GWINNETT COUNTY, GA (CBS ATLANTA) -
A CBS Atlanta News investigation has uncovered your tax dollars going to line someone else's pockets.
CBS Atlanta News went undercover to expose a scheme to steal from the federal government. The IRS is the target, but the taxpayers are paying the price.
The sign outside a Lawrenceville title loan company claims you can get $8,200 back without having to show a W2. And according to an employee at the Georgia Tax Office, chances are you will never get caught.
But CBS Atlanta News caught the title loan company in the act while breaking federal laws.
An undercover photographer went to the title loan company, posing as a taxpayer who needed to get their taxes done.
"Do you have any kids?" asked a woman who identified herself as Jazmin.
"I have two," CBS Atlanta News' undercover photographer replied.
"We can probably get you about $7,000 maybe," she said.
The undercover photographer, Steve Franklin, was sent inside to investigate exactly how the employees at the Gwinnett County title loan company planned to make him money. The pitch sounded too good to be true - they can get you free money just for having kids and promises of thousands of dollars in cash back with few questions asked.
"Doing it this way, you don't have to pay taxes," Jazmin said.
"And if I can't get any W2s?" Franklin asked.
"No you don't need it," Jazmin said. "You don't need any of that, that's what I'm telling you."
This scheme targets the earned income tax and childcare credits, both programs set up by the federal government to help low-income families. But this company is abusing those programs to get people money that isn't theirs.
"It is going through. I mean, everybody has been getting their money," Jazmin reassured Franklin.
Jazmin said she would fill out the paperwork, then she showed Franklin how easy it is to steal money.
"So how much money do you think you made for the year with everything added up?" Jazmin asked.
"If I had to guess, I'd probably say 30 (thousand)," Franklin answered.
"$30,000?" Jazmin asked. "All right, well, we don't want to do $30,000 because $30,000 and not paying taxes, you will owe money."
Instead of reporting what Franklin said he made, she picked another number that would get him thousands of dollars back.
"With two kids, the max we do is like $16,800. And so we will put it at like $16,300 and see what it comes back as," Jazmin said.
Jazmin said the total refund would be $6,667 and then she found one more way to squeeze another $1,000 out of the government.
"Even though we didn't do education, we can put education on there and that will be an extra $1,000," Jazmin said. "You know they don't check it. We are not going to do anything to get you audited or anything, but they don't check it."
CBS Atlanta News spoke to Bob Gard, a certified personal accountant, about the situation.
"All you have to do is put down some dependents, put down your income and take the credit. And If you don't get audited, there is little chance of getting caught. It is very simple," Gard said.
Gard, a tax expert, says child tax credits are one of the easiest areas for people to steal money because the IRS has few resources to catch thieves.
"The prosecution needs to be harder, they need to come down jail time for the people who commit fraud," Gard said.
So CBS Atlanta News' Chief Investigative Reporter Wendy Saltzman returned to the title loan business and asked the Tough Questions.
"Why are you encouraging people to steal from the government?" Saltzman asked Jazmin.
But Jazmin didn't want to talk.
"Isn't this illegal, Jazmin? Isn't this illegal?" Saltzman asked.
Jazmin didn't respond.
"How much of a cut are you getting of this?" Saltzman asked again, to no response.
CBS Atlanta News learned that the tax preparers were making between $150 to $400 for each tax return they submitted at the title loan company.
Two days later, CBS Atlanta News learned that the doors of the fly-by-night operation were locked.
CBS Atlanta News then reported the fraud to the IRS, but they simply weren't interested in doing anything about it.
Unfortunately, that may be why this type of program continues to be such an easy target for fraud.
Copyright 2012 WGCL-TV (Meredith Corporation). All rights reserved.
