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PolitiFact: Sen. Bill Nelson is correct that Florida leads nation in inmates committing tax fraud

The statement

"The entire state of Florida led the nation last year with the most prison inmates committing tax fraud."

Sen. Bill Nelson, D-Fla., in a letter to IRS Commissioner Douglas Shulman

The ruling

Each inmate is in charge of requesting his or her own 1040 form and filing his or her taxes "like any other citizen," said Florida Department of Corrections spokeswoman Jo Ellyn Rackleff. Typically, inmates don't earn enough from their prison jobs to trigger a tax withholding, but some are eligible for tax returns because they and their families receive income from inheritances or other investments.

Since 2005, Nelson, a member of the Senate Finance Committee, has pushed for legislation that would allow the Internal Revenue Service to share inmates' financial information with state and federal prison officials in hopes of stopping fraud.

In 2008, Congress passed the Inmate Tax Fraud Prevention Act, which allowed the IRS to share inmate information with federal prisons, and in 2010 lawmakers passed an amendment that allowed the IRS to share the same information with state prisons. However, for the exchange of information to proceed between the state prisons and the IRS, states and the federal tax-collection agency have to sign separate agreements — a step that has not yet been completed.

The IRS's goal is to have a Memorandum of Understanding for each state prior to January 2012, according to a December 2010 report by the Treasury Inspector General for Tax Administration.

Nelson's office provided us with spreadsheets compiled by the IRS listing the amount of tax fraud committed by state.

Overall, inmates nationwide filed 44,944 false claims and were given $39.1  million in undeserved tax refunds in 2009, according to the IRS figures.

In Florida, inmates submitted 8,777 bogus tax claims in 2009, the latest year for which data are available. Of those claims, 2,911 were given tax refunds to the tune of $12.58 million.

Of all 50 states, Florida indeed came out on top for claims filed and refunds received. Georgia is second with 7,351 fraudulent claims filed and $3.56 million received, and California is third with 3,713 bogus claims filed and $2.76 million received.

It may not be a top ranking that Florida wishes to claim, but Nelson is correct in noting that the state leads the nation in prisoners committing tax fraud. We rate this claim True.

Edited for print. For more rulings, go to


PolitiFact: Sen. Bill Nelson is correct that Florida leads nation in inmates committing tax fraud 03/28/11 [Last modified: Monday, March 28, 2011 7:20pm]
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