Identity Theft May Cost IRS $21 Billion Over Next 5 Years 112
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."
The IRS also gains money from identity theft (Score:5, Interesting)
I had someone file under my SSN this year. (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.
Re:The IRS also gains money from identity theft (Score:3, Interesting)
The head of the SSA recently estimated that about 80% of employed illegal aliens in the US are using a fake social security number.
Assuming $10K/yr in average wages for this group, that's between $10 billion and $15 billion in tax revenue.