A former Internal Revenue Service employee has been sentenced to four years and nine months in prison in connection with a tax fraud and identity theft scheme.

Missy A. Sledge, 47, was employed for 12 years by the IRS. According to prosecutors, she worked with other criminals who would file fraudulent tax returns using the stolen identities of real taxpayers. They would then provide the Social Security numbers associated with the fraudulent returns to Sledge. If the returns were routed to her for review as part of her job, she allegedly would make sure that the fraudulent return payment was released by the IRS. 

The scheme also involved some tax returns that were not fraudulent.  Sledge allegedly would look for large, valid tax refunds pending in the IRS computer systems, and then provide the other individuals with information needed to fraudulently change the address of those taxpayers in the IRS systems.  The valid refund would then be mailed to the address controlled by the individuals working with Sledge, rather than to the taxpayer's actual address. The individuals working with Sledge paid her a share of the proceeds from these activities.

As a result of Sledge's misconduct, a total of 60 taxpayers either had fraudulent tax returns filed or released using their Social Security numbers, or had valid refunds they were lawfully due redirected to criminals waiting to steal those refunds. The total loss to the government was $501,048.40, with a larger loss of $2,378,678.35 having been attempted, but rejected by the IRS before refunds were issued.  Sledge's conduct continued until she was arrested at her desk at work on Nov. 26, 2013.

Sledge has been sentenced to four years and nine months in prison to be followed by five years of supervised release, and ordered to pay restitution in the amount of $501,048.40. Sledge was convicted on the charges on Feb. 18, 2014, after she pleaded guilty. Prosecutors announced the sentencing last week in Atlanta. 

“As an IRS employee for over 12 years, Sledge reviewed suspicious returns to protect the government from being victimized by fraud,” said U.S. Attorney Sally Quillian Yates in a statement. “Instead, she used her IRS access to victimize 60 taxpayers, and cost the government over $500,000.00 in losses. Citizens file their taxes expecting government employees to handle their returns and trust that their information will be safe.  Identity theft is a growing problem, one we combat daily.”

This case was investigated by the U.S. Treasury Inspector General for Tax Administration.

“The misuse of public office for private gain, especially by those employees who are entrusted with the fair and honest administration of our Nation’s tax laws, is a particularly heinous crime,” said TIGTA Inspector General J. Russell George. “In carrying out our duty to safeguard the integrity of the tax administration system, our office will continue to investigate vigorously allegations of corruption and to ensure that those responsible for misconduct are held accountable.”

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