Missouri tax agency says it thwarted $118 million refund scheme
The Missouri Department of Revenue is investigating an income tax scheme the agency says tried to fool the state into issuing $118 million in tax refunds.
The plot, first revealed publicly as a footnote in the Feb. 7 daily revenue report, has been turned over to the department’s Criminal Tax Investigation Bureau, spokeswoman Anne Marie Moy said.
In the footnote, the department stated that January general revenue is “inflated approximately $118,000,000 due to an individual fraud scheme identified at the beginning of February 2023. The fraudulent payments will be reversed during the month of February 2023.”
The faked payments came in during the final days of January, Moy wrote in an email. Moy wrote that the scheme involved fake bank accounts and payments.
“Fraudsters attempted to make fake income tax payments from fake bank accounts in the hopes that the overages would trigger a refund in the DOR’s payment system,” Moy wrote.
No tax money was lost to the scheme, Moy said.
Moy provided few details. She was not able to say whether it was a single individual or group of individuals, or even where the scheme originated.
“I just know the total was $118 million and it was done over a few days,” Moy said in a telephone interview. “They were big enough to raise our attention.”
The January revenue report shows that the department received $1 billion in income tax payments during the month, almost $175 million more than in January 2022. Without the footnote that appeared first on the Tuesday daily report, that 21% increase would not have seemed unusual because overall general revenue receipts have grown by almost 16% this year. Corporate income tax receipts for January were 32% higher than January 2022.
In an email, Moy wrote that the scheme involved fake bank accounts and payments.
The department was alerted to the possibility of refund schemes by accounts from other states, although Moy was unable to name another state where a similar attempt was made.
“Throughout the past year this has been a problem and our department was alerted to it a year ago and we have been on the lookout,” Moy said.
This story was originally published by the Missouri Independent, part of States Newsroom, a network of news outlets supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence.