IRS Investigates Prison Tax Refund Scheme

MINNEAPOLIS (AP) - The Internal Revenue Service says it's investigating a large-scale tax refund scheme run from a Minnesota prison.

A search warrant application says the case likely involves hundreds of fraudulent tax returns from 2006 to 2012. IRS investigator Kenneth Fry says the tax returns contain fraudulent and fictitious information, including wage and withholding details.

According to court documents, the IRS is focusing on an inmate in the Stillwater state prison who is due to be released in May. Fry says refunds from the bogus returns were split among co-conspirators.

Authorities are also investigating some alleged accomplices outside of prison. The IRS hasn't said how much money was involved in the alleged scheme.