U.S. tax fraud seen on the rise

DETROIT, April 10 (UPI) -- The U.S. Internal Revenue Service in Detroit has noticed an increase in attempted income tax fraud using phony income reporting W-2 forms.

IRS spokesman Steve Moore told the Detroit News the scammers are recruiting mostly low-income individuals at homeless shelters and soup kitchens for names and Social Security numbers to file fake claims, often for the earned income tax credit of at least $4,500.

Moore said the arrangement is that the fraudster splits the proceeds with the person providing a name and Social Security number.

However, he said civil penalties and fines can backfire for a low-income person caught participating.

"They're going to owe us the entire amount of money, whether they split it with (the organizer of the fraud) or not."

Last week, a Detroit grand jury handed down a 10-count indictment against 29-year-old Mikcus Bishop of no fixed address, charging him with conspiracy to defraud the government and a variety of related tax charges. If convicted, he faces up to 10 years in prison, the report said.