An Oregon woman is on the hook for what Internal Revenue Service investigators are calling one of the largest cases of tax fraud in the state's history.
Krystle Marie Reyes, of Salem, Ore. allegedly weaseled more than $2 million from the state by filing a false return using automated TurboTax software, according to a police report obtained by Oregon Live.
Reyes, 25, reported $3 million in wages and claimed $2.1 million in returns, which worked its way through TurboTax's system and was approved by the state. Soon enough, a Visa debit card loaded with the refund was in her hands.
What's bizarre about the situation is how Reyes was caught. She reported the card as lost or stolen to the issuer, which apparently saw enough red flags to get the state's revenue service on the case.
When Reyes was taken into custody June 6, she'd managed to spend about $150,000 over a two-month period, including a $2,000 Dodge Caravan and more than $800 in tires and wheels, according to the police report.
Her case underscores the debate over whether the IRS should issue refunds via debit cards. On one hand, they're a boon to unbanked Americans and enable consumers to see tax returns in as little as two weeks.
But that also means fraudsters can get their hands on cash faster than authorities can catch them. Reyes was running around Salem for two months before authorities cottoned on – and that was only after she practically served herself up on a silver platter by reporting the card stolen.
Oregon may have its own issues to sort out – the state reported $559 million in delinquent taxes in 2010 alone, according to Oregon Live – but tax fraud is running rampant nationwide.
The IRS counted more than 900,000 fraudulent tax returns in 2011 that totaled $6.5 billion – and that's only counting returns that weren't actually issued. The IRS told CNN earlier this year it couldn't estimate how much cash has been doled out to scammers. LINK
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