The Taxpayer Protection Program Improves Identity Theft Detection; However, Case Processing Controls Need to Be Improved
Thursday, July 25th, 2013 @ 3:27PM
June 21, 2013 Reference Number: 2013-40-062
The Treasury Inspector General for Tax Administration (TIGTA) issued a new audit report on July 17, 2013.
TIGTA initiated its audit to evaluate whether the Taxpayer Protection Program helped the IRS effectively assist taxpayers and resolve identity theft cases. The Taxpayer Protection Program reviews tax returns that are proactively identified by the IRS as potential identity theft and stops fraudulent returns before they are issued. TIGTA in its June 21, 2013 report (released on July 17, 2013) found that the IRS’s Taxpayer Protection Program improves identity theft detection.
WHAT TIGTA FOUND
In Calendar Year 2012, the program identified 324,670 tax returns that involved identity theft and prevented the issuance of fraudulent tax refunds totaling $2.2 billion. These tax returns were identified before processing was completed to protect tax refunds from being issued.
However, controls over identity theft tax returns worked in the Taxpayer Protection Program need to be strengthened according to TIGTA. Tests of identity theft cases showed that the controls relating to the Taxpayer Protection Program data, cases worked, and training were insufficient. For example:
- Identity theft indicators are not always input on taxpayer accounts.
- Account Management Services system cases are not clearly documented or closed accurately.
- Timeliness measures to accurately track the time frame to resolve cases have not been established.
- Documentation of employee training is not sufficient.