The Internal Revenue Service has identified a significant refund scheme involving hundreds of people living in the Commonwealth of the Northern Mariana Islands.According to the agency, many nonresidents and locals of the islands filed income tax returns requesting refund checks including the earned income tax credit. But CNMI residents are not required to file a return with the IRS and are not eligible to claim the credit.
Island taxpayers who received improper refunds, as well as individuals who had their bank accounts frozen in the process of receiving a refund, should file Form 1040X, “Amended U.S. Tax Return,” to repay the amount to the IRS.
The IRS, along with the islands’ Department of Revenue and Taxation are working to sort out the scheme and explain to filers why they are not eligible for the refund. More information about how to complete the form is available online at www.IRS.gov.
According to authorities, Antonieta Aguon, 44, of the Philippines, recently pleaded guilty to one count of aiding tax fraud. According to prosecutors, Aguon used online sites to conspire with recruiters, who brought her taxpayer information, including names, social security numbers, bank account information and fictitious U.S. addresses. Over the course of two years, Aguon allegedly prepared approximately 275 false returns -- taking a 5-percent cut for herself, and another 5 percent for the recruiters -- and causing a loss to the United States of approximately $850,000.
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