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IRS May Lose $21 Billion Over Next 5 Years Due To Identity Theft

Identity theft is becoming increasingly common in the digital realm. And with most governmental institutions in developed nations, hooked up to the digital world one way or the other, are directly vulnerable to such frauds. Internal Revenue Service (IRS) of the States has now found out that it has been paying huge sums to the wrong people – just because of identity theft.


Internal Revenue Service (IRS)

Methods used in identity theft is simple to super complex. A simple example is – a person, who is the criminal, files a false tax return in the name of someone who has died. IRS would then pay refunds on that tax filing, paying it back straight to the criminal. In this way, IRS has already lost huge amounts of money.

And things don’t seem to get any better in the coming days. The Treasury Inspector General of Tax Administration (TIGTA), which is also a part of the US Treasury, has now issued an audit report. This report makes some ominous predictions for IRS. For instance, it states that IRS stands to lost as much as $21 billion over the next 5 years due to identity theft!

The report also mildly lambasted IRS when it said, “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.”

TIGTA also made some significant suggestions in the report, “In addition, TIGTA recommended legislation to expand the IRS’s access to and authority to use the National Directory of New Hires database for the purposes of identifying individuals filing fraudulent tax returns.”

Source: TIGTA

Courtesy: Slashdot
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