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Identity Theft May Cost IRS $21 Billion Over Next 5 Years

Posted by Soulskill on from the aren't-you-glad-you-filed-on-time dept.

alphadogg writes "A new audit of the Internal Revenue Service has found the agency paid refunds to criminals who filed false tax returns, in some cases on behalf of people who had died, according to the Treasury Inspector General for Tax Administration (TIGTA), which is part of the U.S. Treasury. The IRS stands to lose as much as $21 billion in revenue over the next five years due to identity theft, according to TIGTA's audit (PDF), dated July 19 but publicized on Thursday. 'While the IRS does not have access to all third-party information documents at the time tax returns are filed, some third-party information is available. However, the IRS has not developed processes to obtain and use this third-party information."

3 of 112 comments (clear)

  1. The IRS also gains money from identity theft by Solandri · · Score: 4, Interesting

    Several years ago, we found out some of our employees were illegal immigrants who had applied using fake SSNs and IDs. When I thought of the consequences, I realized the IRS collected FICA taxes from these people (social security, medicare) which would never be paid back to them. And if they were due a refund on their income tax withholdings, they were unlikely to ever claim them.

    1. Re:The IRS also gains money from identity theft by Anonymous Coward · · Score: 4, Insightful

      This is part of the reason we need to stop calling this identity theft and start calling it what it really is: Tax fraud. Same with banks. Someone pretends to be me and tricks the bank into given them money, it's bank fraud. My identity wasn't stolen. I'm just fine. The bank made a mistake and they need to clean up the mess not me. Calling it identity fraud puts the blame on me instead of the bank who made the mistake.

  2. I had someone file under my SSN this year. by Anonymous Coward · · Score: 4, Interesting

    I filed my taxes on February 3rd electronically and found out someone had already filed under my SSN. I filled out the correct paperwork and sent it in, along with opening a case with the FTC and heard nothing from the IRS until I went into my local office 2 weeks ago. I found there is an open case but that I will be lucky to see my return (approx $1500) within 2 years. I have filed my return from the same address for several years, and it was my second year filing jointly with my wife. I believe there is little to no fraud detection at the IRS, as a tiny amount of research on their part would have stopped this entire mess.