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Pandemic Revenue Opportunities

Pandemic Revenue Opportunities

Income-IncomeFraud-IncomeTaxes-21
Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion economic stimulus bill signed into law by Congress in response to the economic fallout of the COVID-19 pandemic in the United States. It was a robust bill passed to meet every complicated needs of American citizens. But it also provided a wide range of opportunity for fraudsters to steal from the U.S. Government. The CAREs Act offered tax benefits that were not only never offered before, but not easily regulated. A fraudsters dream. The Employee Retention (ERC) were implemented to encourage businesses to keep employees on their payroll. Another tax credit, the Families First Coronavirus Response Act (FFCRA), required certain businesses to provide employees with sick leave of up to 80 hours and expanded family and medical leave of up to 10 weeks for reasons related to COVID. Not all companies qualified. And if either credit was used, a company was not able to obtain other benefits under the CARES Act. But when the company is made up, there is no need to consider which benefit is best! Unless you get caught.

On February 3, 2023, Zachary Bassett and Mason Warr, owners of 1099 Tax Pros in Provo, Utah, were charged with Employee Retention Credit fraud and Families First Coronavirus Response fraud. From April 2020 to August 2021, Bassett and Warr, allegedly falsified over 1,000 customer tax forms to qualify for ERC and FFCRA credits, resulting in over $11 million stolen via tax refunds.

Court documents allege Basset and Warr instructed and trained their employees on how to prepare the tax forms to include false or fraudulent information to increase the number of credits received. Employees were also allegedly trained on how to retain clients. Nice employee training program. That is what fraudsters call how to target pandemic era revenue opportunities!

Great job by the IRS in this investigation.

Today’s Fraud Of The Day is based an article “Two Utah county men, business charged with $11M COVID tax fraud scheme” published on KSLtv on February 3, 2023

Two Utah County men, as well as an accounting business in Provo, have been charged with a COVID-related tax fraud scheme totaling more than $11 million.

According to court documents, Zachary Bassett, 39, of Provo, Mason Warr, 37, of Vineyard, and COS Accounting & Tax LLC, dba 1099 Tax Pros prepared and submitted “more than one thousand tax forms to the IRS, claiming in excess of $11 million in false and fraudulent Employee Retention Credit (ERC) and sick and family leave wage credits for clients of COS Accounting.”

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