The Internal Revenue Service has more than one problem. Noncompliance, scofflaws, tax evasion, plus plain vanilla tax errors found during random audits of Minnesota taxpayers are just a few of the issues with which the IRS is dealing.
An additional issue in recent years has been identity theft which can lead to fraudulent tax returns. Tax issues and controversy abounds when a tax filer submits a tax return only to be told by the IRS that the return has already been filed and the refund processed.
A recent news article points out just how difficult it can be to settle this tax controversy. The IRS is aware of the issue and its prevalence was acknowledged in a report by the Treasury Inspector General for Tax Administration.
The IRS reportedly found 940,000 questionable tax returns in a single year and was able to stop about $6.5 billion in fraudulent refunds. However, $5 billion in refunds apparently slipped through the cracks that same year.
What do you do if someone filed a fraudulent return in your name? You could call the IRS, however it was reported that not everyone who answers the phone has been trained to deal with the issue of fraudulent tax returns.
The Inspector General’s report also stated that when a taxpayer did find the correct person to address the identity theft fraudulent issue, the taxpayers were often given unrealistic time frames for when they might expect their refund. Apparently 90 days is not realistic.
There may come a time when Congress needs to provide guidance to the IRS as to which is more important: speedy refunds or halting fraud.
It may be a good idea to consult with a legal or other professional if you have been a victim of identity theft and tax fraud. The financial consequences can be far-reaching and long-lasting.
Source: The News and Advance, “IRS fails tax fraud victims, new report finds,” Elaine Silvestrini, May 9, 2012