3 More of the Most Bizarre Tax Fraud Cases the IRS Has Ever Heard
Written by
Nicholas Morine
Edited by
Zuri Anderson
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Tax season may bring with it thoughts of boring paperwork and stern accountants going over filings line by line, but the IRS also sees its fair share of tax fraud going on — and some of the attempts are truly strange.
For example, many taxpayers are convinced of the false belief that either filing a tax return itself is voluntary, or that payment of federal income tax itself is voluntary, and therefore attempt to deploy this excuse to shirk their legal obligations.
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Not only does the IRS explicitly term both of these arguments or excuses as frivolous in nature, but in making these excuses to avoid filing or paying taxes, perpetrators could face extremely stiff financial penalties as a result.
Now, on to the more eccentric examples of attempted deception or tax fraud involving the IRS.
The Case of the Consultant-Slash-Arsonist
A struggling Pittsburgh furniture store owner turned to a paid arsonist to burn his establishment to the ground, and was about to net $500,000 in insurance payouts as a result, CBS News reported. However, when filing their taxes, said business owner attempted to add the $10,000 “consulting fee” he’d paid to the arsonist as a deduction.
Surprise! That didn’t work, and neither the tax write-off nor the insurance payoff was approved. Whether criminal charges resulted is unclear.
Fallout Shelter: A ‘Preventative Medicine Expense’?
During the Cold War, a man constructed a fully equipped underground fallout shelter in the event of a potential nuclear conflict. On his annual income tax filing, he attempted to deduct related expenses as a “preventative medicine expense.” This, too, was unsuccessful, leaving our prepper on the hook for the whole bill.
Fake Charity, Nonexistent Children Add Up to a ‘Serious Problem’
As part of the larger Feeding Our Future scandal in Minnesota, Abdiaziz Shafii Farah — co-owner of Empire Cuisine & Market in early 2020, when this case begins — enrolled in the Federal Child Nutrition Program as COVID-19 spread.
Per the IRS Criminal Investigation enforcement arm, over the next few years, Farah and co-conspirators submitted fraudulent meal counts, with many names on the roster being evidently fake (such as “Serious Problem” and “Britishy Melony”). In the end, his role in the $300 million fraud ploy earned him a 28-year prison sentence, while also being ordered to pay restitution to the tune of nearly $48 million.
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