The Treasury Inspector General for Tax Administration has found a 39.1 percent increase in the number of fraudulent tax refund attempts identified as of the same period in 2011.
It said problems with credits and early-season refund delays marred an otherwise successful 2012 filing season for the IRS, which identified tax returns with $6.4 billion claimed in fraudulent tax refunds and prevented the issuance of $6.1 billion (95.3 percent) of the fraudulent tax refunds.
TIGTA said the IRS identified 2.1 million fraudulent-refund returns in 2011, up from 971,511 the previous year, and while it stopped $6.9 billion in fraudulent refunds from being issued in 2010, in 2011 it stopped $14.3 billion.
The IG also found that the irs had problems with its filters established to identify fraud and with the program used by the modernized e-file system. And it said that while the irs has improved its processing of homebuyer credit repayments, some taxpayer repayments continue to be inaccurately processed, resulting in almost $2.6 million in erroneous refunds and more than $290,000 in incorrect assessments to taxpayers’ accounts.
Management agreed to initiate recovery programs for erroneously paid claims and to ensure that homebuyer credit claims are processed correctly, as well as to update processing procedures and to start recovery procedures for erroneously refunded credits.
