ID Thieves in USA Steal $26 Mil of Refunds

May 8, 2012 Taxation in USA

ID Theft and Fradulent Tax Returns in the USWASHINGTON D.C. – More than 600 000 US taxpayers were victims of identity tax fraud in 2011, and the IRS does not have the capabilities to adequately detect and prevent such offenses.

On May 8th the head of the Treasury Inspector General for Tax Administration (TIGTA) J. Russell George addressed the Committee on Ways and Means of the US Congress, briefing on the report recently released by TIGTA concerning the occurrence of fraudulent or stolen identification being used in filed tax returns.

According to J. Russell George, TIGTA has found evidence to suggest that over the next five years the IRS will pay approximately USD 26 billion in tax refunds to individuals who are fraudulently using other taxpayers’ identities and details. TIGTA estimates that in 2010 over 271 000 US taxpayers found that their identity had been used by someone else for tax fraud, and by 2011 the number had risen to 640 000.

The TIGTA report suggested that the IRS currently does not have the means or capabilities to detect and adequately pursue the rapidly increasing number of tax returns being filed with stolen identification data.

In his presentation, the head of TIGTA also claimed that the IRS currently does not provide adequate service or support to taxpayers who have found that their tax refund has already been claimed by someone else using their identification details. He said that the IRS processes of resolving cases of ID theft can take longer than one year to complete, and the steps for settling the issue is often confusing to taxpayers, with limited amount of clarification, instruction and communication from the IRS. According to the presented report, the IRS does not analyze the collected information tax frauds to determine emerging patterns or prevent future abuse.

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