Efforts Are Resulting in the Improved Identification of Fraudulent Tax Returns
Tuesday, September 8th, 2015 @ 4:52PM
Treasury Inspector General For Tax Administration – Efforts Are Resulting in the Improved Identification of Fraudulent Tax Returns Involving Identity Theft
The Treasury Inspector General For Tax Administration issued a report on April 24, 2015 (TIGTA). TIGTA reported that identity theft continues to be a serious and evolving issue which has a significant impact on tax administration. Undetected tax refund fraud results in significant unintended Federal outlays and erodes confidence in the Federal tax system. TIGTA reported that the extent of the IRS’s ability to stem the problem is still limited because it does not have access to third-party income and withholding information until well after tax return filings begin. TIGTA’s analysis of Tax Year 2012 tax returns identified 787,343 undetected potentially fraudulent tax returns totaling more than $2.1 billion that have the same characteristics as IRS-confirmed identity theft tax returns. In its report TIGTA identified more than 140,000 Tax Year 2012 returns filed by individuals using an individual Taxpayer Identification Number that have the same characteristics as IRS-confirmed identity theft tax returns. These returns resulted in the issuance of approximately $375 million in potentially fraudulent tax refunds. TIGTA recommended and the IRS agreed with its recommendations to continue to evaluate identity theft-related fraud trends and review fraud filter performance to improve its clustering process which is used to identify returns with multiple uses of addresses and/or bank accounts.