Keep in mind, this is the same IRS that paid $39 million in false refund claims to prisoners in 2009, so chalk this up as progress. Or maybe the nine-figured refund request raised more eyebrows than normal, you know…pigs get fed, hogs get slaughtered and all that.
Unlike most people, Isang Umoren really, really enjoyed preparing his tax return, evidenced by the fact that he filed somewhere between 8 and 15 returns for 2006 alone. Among his more remarkable submissions, Umoren filed a return marked “Amended” on which he claimed negative taxable income and $105 million of estimated payments, requesting a refund of the entire overpayment.
While making estimated payments equal to the GDP of Nicaragua when you have zero taxable income is common practice in the tax world, something about the return caught the attention of the Service. Once the IRS verified that the payments had not been made, they disallowed the refund claim and assessed Umoren with two $5,000 frivolous return penalties pursuant to I.R.C. § 6702.
In his defense, Umoren argued that the enormous refund was an attempt to collect debts owed to him by the United States. Now, I don’t know Umoren personally, but unless he’s an American Indian whose great-great-great grandfather was called “Trades With White Man,” I’m guessing the U.S. government doesn’t owe him a damn thing.
The Tax Court saw it the same way, denying the refund claim and assessing the $10,000 in penalties.