The Treasury Inspector General for Tax Administration reports:
The IRS failed to stop approximately $894 million in fraudulent refunds during PY 2006 when the fraud detection system was not operational. This amount is significantly higher than the IRS’ July 2006 estimate of about $200 million to $300 million and our August 2006 estimate of $318.3 million (both of these estimates were based upon data available at the time). The IRS had previously advised the Senate Appropriations Committee Staff that it did not plan to recover the fraudulent refunds paid because the IRS believed at the time that the total was only $200 million.
But they stopped most of the fraud, right? Well, no:
So if you filed a fraudulent refund claim for 2006, you had an 80% chance of it getting through. That will make folks feel good about sending in their fourth quarter estimated taxes.
Kay Bell has more.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to