TIGTA and Congress Focus on Identity Theft and Tax Fraud

On a same day a House Ways and Means Oversight and Social Security Subcommittees hold a conference on taxation rascal involving temperament theft, a Treasury Inspector General for Tax Administration (TIGTA) expelled a news observant a IRS does not hoop temperament burglary issues good (TIGTA Rep’t No. 2012-40-050).

The May 8 congressional conference designed to inspect how temperament burglary contributes to taxation rascal and either a IRS and a Social Security Administration are doing adequate to strengthen Social Security numbers and to forestall and detect fake taxation earnings filed by temperament thieves.

In announcing a hearing, Oversight Subcommittee Chairman Rep. Charles Boustany Jr., R-La., pronounced it would “explore a vital source of a problem—identity thieves who take Social Security numbers to rivet in taxation fraud. We need to make certain that we have a finish accounting of a distance of a problem, know since it is removing worse, and try what can be finished to fight taxation rascal so we can locate and put some-more temperament thieves in jail.”

TIGTA reports that as of Dec. 31, 2011, a IRS’s Incident Tracking Statistics Report showed that 641,052 taxpayers were influenced by temperament burglary in calendar year 2011.

TIGTA reviewed IRS information from 1.1 million temperament burglary cases, interviewed IRS employees, and reviewed IRS processes and guidelines. TIGTA detected that a “IRS is not effectively providing assistance to victims of temperament theft, and stream processes are not adequate to promulgate temperament burglary procedures to taxpayers, ensuing in increasing weight for victims of temperament theft.”

TIGTA found several problems:

  1. The IRS does not hoop temperament burglary cases in a timely conform and can take some-more than a year to solve them.

  2. Communications between a IRS and victims are singular and confusing, and victims are asked mixed times to justify their identity.

  3. When taxpayers call a IRS to advise it that their electronic taxation lapse was deserted since it appears another particular has already filed a taxation lapse regulating their identity, a IRS instructs them to mail in a paper taxation lapse with a Form 14039, Identity Theft Affidavit, attaching ancillary temperament documents. However, a IRS has been estimate these taxation earnings regulating customary estimate procedures.

  4. Identity burglary discipline and procedures are diluted among 38 opposite Internal Revenue Manual sections. These discipline are unsuitable and conflicting, and not all functions have discipline on doing temperament burglary issues.

  5. The IRS uses small of a information from a temperament burglary cases to brand any trends that could be used to detect or forestall destiny reinstate fraud.

TIGTA done 8 recommendations, that a IRS has concluded to. TIGTA endorsed that a IRS:

  1. Establish burden for a Identity Theft Program;

  2. Implement a routine to safeguard that IRS notices and association are not sent to a residence listed on a temperament thief’s taxation return;

  3. Conduct an research of a letters sent to taxpayers per temperament theft;

  4. Ensure taxpayers are told when a IRS has perceived their identifying documents;

  5. Create a specialized section in a Accounts Management duty to exclusively work on temperament burglary cases;

  6. Ensure all peculiarity examination systems used by IRS functions and offices operative on temperament burglary cases are revised to name a deputy representation of temperament burglary cases;

  7. Revise procedures for a Correspondence Imaging System screening process; and

  8. Ensure programming is practiced so that temperament burglary issues can be tracked and analyzed for trends and patterns.

About Emil Estafanous, CPA
Certified Public Accountant (CPA) Tax Professional committed in representing taxpayers and resolving their tax problems.

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