1099 OID fraud is a common scam used to obtain money from the U.S. Internal Revenue Service (IRS) by filing false tax refund claims. Form 1099-OID is intended to be submitted to the IRS by the holder of debt instruments (such as bonds, notes, or certificates) which were discounted at purchase to report the taxable difference between the instruments' actual value and the discounted purchase price. In 1099-OID fraud, the filer of a tax return fills out the form themselves with a false withholding amount and submits it to the IRS in an attempt to reduce tax liability. Promoters of the fraud allege that the withheld amount exists in a secret bank account, a claim that originates from the redemption movement. The IRS initially overlooked the fraud because it lacked time to verify withholding da