Government Accountability Office: Identity Theft

Tuesday, September 1st, 2015 @ 8:00AM

Additional Actions Could Help IRS Combat the Large, Evolving Threat of Refund Fraud

Committee For Efficient Government reports that the latest figures on estimates of the amount of money the IRS paid in fraudulent identity theft refunds is contained in a Government Accountability Office (GAO) report released on September 22, 2014.

The GAO found that based on preliminary analysis, the Internal Revenue Service (IRS) estimates it paid $5.2 billion in fraudulent identity theft (IDT) refunds in filing season 2013, while preventing $24.2 billion (based on what it could detect). The full extent is unknown because of the challenges inherent in detecting IDT refund fraud. Based upon this recent report Committee For Efficient Government believes that the Identity Theft-Based Tax Refund Fraud problem is getting worse.

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Posted by Robert Strait
Categories: Government report

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What is the Identity Theft Tax Refund Fraud Problem?

In general, tax-related identity theft occurs when an individual intentionally uses the Social Security number (SSN) of another person to file a false tax return with the intention of obtaining an unauthorized refund. Identity theft wreaks havoc on our tax system in many ways. Victims of identity theft not only must deal with the aftermath of an emotionally draining crime, but may also have to deal with the IRS for years to untangle the resulting tax account problems. Identity theft also impacts the public fisc, as Treasury funds are diverted to pay out improper refunds claimed by opportunistic perpetrators. In addition, identity theft takes a significant toll on the IRS, tying up limited resources that it could otherwise shift to taxpayer service or compliance initiatives