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STRATEGIC TAX LAWYERS:  TAX BLOG

Important Ways to Improve Fraudulent Tax Returns

Tuesday, August 11, 2015
The IRS is working diligently and quickly to fix and improve the process to detect identity theft and prevent tax return fraud. The only problem is, the IRS is limited with the extent of their ability to stop this problem since they can’t access any third-party information until well after the tax return is filed.  The IRS is working to introduce legislation aimed at accelerating and increasing their access to third-party information that would improve their efforts to detect fraudulent tax returns.

We are the Strategic Tax Lawyers, LLP, Encino Tax Lawyers, with specialized Intent to Levy Lawyers, IRS CP504 Attorneys, and Audit Tax Attorneys. We have years of experience and knowledge related to tax fraud and we want to update you about the efforts the IRS’s ongoing strategies to detect and prevent fraudulent tax returns that result in identity theft.  The IRS takes this matter very seriously and is initiating ways to end this occurrence…or at least make it more difficult for con artists.

After an analysis of 2012’s Tax Year, it was discovered that there were over 787,000 potentially fraudulent tax returns that went undetected.  The IRS processed these fraudulent returns and issued tax refunds to the con artists that totaled over $2 billion.  The data analysis also discovered that many of the tax returns had the same address and/or bank account numbers that were not previously identified by the filtering tool that the IRS operates. In addition, the personal pin number that individuals use to file tax returns have been fraudulently used. The analysis discovered that over 140,000 tax returns in 2012 tax returns were filed using personal pin numbers with similar characteristics as those confirmed by the IRS as tax returns filed by con artists.  This fraudulent activity caused the IRS to pay out nearly $375 million in fraudulent tax refunds.

The IRS has spent extraordinary amount of time analyzing identity theft patterns.  Through this process they have recognized that these patterns are constantly evolving.  Therefore, the IRS will need to adapt its fraud detection and prevention processes. The problem with tax refund fraud that goes undetected results in lowered taxpayer’s confidence in the IRS and the tax system.

It has been recommended that the IRS continue to assess the filters that manage tax returns that have multiple use personal pin numbers, addresses, and bank accounts and to expand these filters to address filing patterns that may indicate cases related to identity theft.

If you are looking for Encino Tax Lawyers, contact the Strategic Tax Lawyers, a firm of Intent to Levy Lawyers, IRS CP504 Attorneys, and Audit Tax Attorneys who have extensive training and experience in IRS-related matters and the IRS tax code.  If you have any legal issues with the IRS related to your taxes, call the Strategic Tax Lawyers today at (800) 669-4775 for a free consultation.  You will get your issue resolved in the most efficient manner possible.