Tax Fraud 101: Don’t Advertise It

downloadIn a story that should begin with “A Florida Man”, we instead find ourselves with Raheem L. McClain of Ozark, Missouri – who has just been arrested for soliciting tax fraud.

Just how far would you go for a tax deduction?

In an interesting twist on the theme, the story here begins with McClain’s alleged solicitation for purchasing childrens’ identification to claim as dependents on his tax return.

The IRS’s 2015 tax guidelines allow for a $4,000 exemption for each qualifying child dependent. To qualify for this exemption, the child must live with you more than half of the year and be under 19 at the end of the year, or under 24 and a full-time student for the year (defined as attending school for at least part of five calendar months during the year). Although there is no limit to the number of dependents one can claim, at a certain point it begins to work against the alternate tax / earned income credit, and so many parents with multiple children only claim some of them. As for the rest, well, that’s where McClain comes in.

In a blatant Craigslist post, he offered $750 per child to any parent willing to ‘lend their child’s deduction’ to him:

“WANTED: KIDS TO CLAIM ON INCOME TAXES – $750 (SPRINGFIELD,MO)

IF YOU HAVE SOME KIDS YOU ARENT CLAIMING, I WILL PAY YOU A $750 EACH TO CLAIM THEM ON MY INCOME TAX. IF INTERESTED, REPLY TO THIS AD.”

According to the Justice Department, McClain was caught doing this by a discrepancy in his returns. That is, it wasn’t so much the advertisement which caught the prosecutors’ attention; rather, one year McClaim claimed 1 son and 2 daughters, and the next year 1 daughter and 2 sons, all with the same names and identifiers.

Sound ridiculous? Sadly for humanity, McClain is not alone in advertising his stupidity (like this man who was arrested after advertising the sale of illegal tortoises on Facebook; or this hitman arrested for soliciting kills). Luckily, while many innocents get swept up into audits, the IRS audit and criminal investigation departments actually do find legitimate cases of fraud like these.

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