Paying taxes may feel like a curse, but a Tennessee woman took it a step further: Mayra Edith Blair allegedly tried to intimidate a former employee and key witness in her tax trial by attempting to put a curse on her. Blair, an alleged “bruja” (witch), also practiced a Mexican folk religion, Santa Muerte (“Saint Death”).
In the early stages of her trial, Blair placed a photo of Diana Ortiz-Zarate, a former witness and key witness against her, on the altar of Santa Muerte. Prosecutors alleged it was an intimidation tactic – akin to voodoo – but Judge C. Clifford Shirley found that the prosecutor did not prove that Blair’s actions were intended to harm Ortiz. While prosecutors couldn’t prove that Blair was trying to intimidate Ortiz, they did have evidence of tax fraud. Blair eventually admitted her role in a $10.8 million scam intended to defraud the Internal Revenue Service (IRS) and pleaded guilty to conspiracy to defraud the U.S. and conspiracy to commit money laundering.
Here’s how the elaborate scheme worked: the defendants (there were originally 11, including Blair) made up identities and used false documents from Mexico, Honduras, and Guatemala to support fake individual taxpayer identification number (ITIN) applications. Here’s where Blair’s participation began: she used those ITINs and made up identities to file false tax returns claiming substantial refunds. The refund checks were then cashed in various spots all over the country using fake identification documents. In return for Blair’s, she received a cut of the proceeds. According to the IRS, the scheme netted at least $10.8 million in false refunds in three years.
Why an ITIN? A taxpayer who is not eligible for a Social Security Number may be eligible for an individual taxpayer identification number (ITIN). Taxpayers who are eligible for an ITIN include spouses and dependents who are not eligible for a SSN; a nonresident alien (NRA) claiming reduced withholding under a tax treaty; a NRA not eligible for a SSN who is required to file a U.S. tax return or who is filing a U.S. tax return only to claim a refund; and certain NRA students, professors, and researchers.
An ITIN isn’t as tax beneficial as an SSN since your ability to claim certain tax breaks, such as the Earned Income Tax Credit (EITC), is limited. However, an ITIN can be used to claim the Additional Child Tax Credit – a refundable credit for those with three or more eligible dependents. With a refundable tax credit, you can get a tax refund even if you didn’t have any tax obligation and even if you didn’t pay into the system.
Until recently, matching ITINs to real taxpayers was somewhat difficult since ITINs were not being used regularly to file tax returns and related fraud boomed. Two important policy changes were implemented to try and change that:
- As of the 2015 tax season, the IRS limits the number of refunds electronically deposited into a single financial account (such as a savings or checking account) or prepaid debit card to three. Under the new rules, any subsequent refunds will be issued by paper check and mailed to the taxpayer; and
- As of 2013, unused ITINs will expire after five years: the IRS began deactivating unused ITINs in 2016. Under the current rules, an ITIN will not automatically expire so long as it has been used on at least one tax return in the past five years.
The fraud perpetrated by Blair and her co-conspirators predates the new rules beginning “in or around 2012.”
According to the complaint (downloads as a pdf), the government is seeking restitution from those involved in the scheme of at least $10.8 million. Accounts bearing hundreds of thousands of dollars were seized as part of the investigation and were included, together with real estate, as part of the forfeiture request.
Blair is the seventh defendant in the case to reach a deal with prosecutors. At her sentencing hearing on October 12, Blair is expected to receive jail time. There’s no word on whether she’ll be back at the altar of Santa Muerte.
