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IRS
Issued $1.6 Billion in Fraudulent Tax Refunds
Washington, D.C. (Oct. 31, 2008)
By
WebCPA.com staff
The Internal Revenue Service distributed roughly $1.6 billion in refunds to
taxpayers who filed falsified tax returns in 2006 and 2007, despite efforts
to stop them, according to a new
report from the Treasury Department's inspector general.
The
Treasury Inspector General for Tax Administration (TIGTA) found that the
number of falsified tax returns filed in an attempt to obtain fraudulent tax
refunds increased dramatically between 2006 and 2007. TIGTA blamed the IRS
payments on "a failed fraud detection system and insufficient resources to
work all the fraudulent returns."
During
the 2006 filing season, the IRS detected and stopped $188 million in
fraudulent refunds, but failed to stop an estimated $894 million in
fraudulent refunds because its fraud detection system was not operational.
While the fraud detection system was available for the 2007 processing
season, and the IRS initially stopped $1.2 billion in fraudulent refunds,
TIGTA estimates an additional $742 million in fraudulent refunds were
issued.
"This
is a significant revenue loss to the federal government that must be
addressed," said TIGTA Inspector General J. Russell George in a statement.
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