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Prisoners, Children and Dead People Collected Tax Breaks Under Clunkers Program

New report finds extensive fraud responsible over $1 mil in claims.

by on Jun.10, 2011

A new report by a government watchdog agency found children, dead people and prisoners collected checks illegally under the Cash for Clunkers program.

In some parts of the country, it’s been claimed, the dead still vote.  True or not, it appears at least some folks who were clearly not around to buy a car nonetheless had claims filed on their behalf for tax credits on the oft-maligned Cash for Clunkers program used to spur U.S. car sales in 2009.

The government-run watchdog, the Treasury Inspector General for Tax Administration, also found 439 prisoners put in claims, “even though they were in prison for a full year in 2009 when the vehicle was purportedly purchased,” the agency reported.  And it found that a number of children under driving age also submitted claims for tax credits that ranged as high as $4,500 a vehicle.

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The report found that the Internal Revenue Service failed to flag 4,257 questionable claims, in all, which generated $151.1 million in tax refunds.  That was a relatively small figure when compared with the overall size of the so-called Cash for Clunkers campaign, which Congress approved as a way to pull the U.S. auto industry out of its worst downturn since the Great Depression.

“While no amount of fraud is acceptable, more than 4.3 million taxpayers claimed more than $7.2 billion in qualified motor vehicle deductions and only a small percentage involved questionable claims,” the tax agency said.

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