IRS Identifies 2 Million Fraudulent Tax Returns

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You might not be surprised to learn that the IRS has a fraud detection system, I suspect it’s similar to the system they use to pick which returns to audit, but you might be surprised to find that it has detected roughly two million “potentially fraudulent” tax returns last year. It’s an increase of 72% from the previous year and that doesn’t count the million (actual number is around 900,000) tax returns that were part of “Operation Mass Mail.” Operation Mass Mail was a scheme in which tax cheats submitted fraudulent returns that were automatically voided before they were processed (unfortunately, tens of thousands of those returns were actually legitimate).

It’s part of a larger story about how the IRS is underfunded and how it’s been unable to keep up with demand. Apparently, you could only get to someone on the phone after waiting for an hour and the IRS could only answer one out of every 9 calls it received from taxpayers wondering where their refunds were. It really makes you wonder if the IRS is mismanaged or if they simply don’t have enough people. Unlike other agencies, it seems like IRS is one that we’d want to fully fund since it’s responsible for collecting our revenue. 🙂

{ 8 comments, please add your thoughts now! }

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8 Responses to “IRS Identifies 2 Million Fraudulent Tax Returns”

  1. zapeta says:

    Given the complexity of the tax code and the fact that every American deals with the IRS, I’d guess they are woefully understaffed.

    • mannymacho says:

      Is the IRS understaffed, or is the tax code just too complex?

      • NateUVM says:

        Just like our overall fiscal problem being a mix of too much spending along with too little revenue, it’s probably a little bit of both.

      • Seth says:

        I’ll second that one. It is absolutely ridiculous that most people have to rely on third party services to complete their tax submissions. Makes it harder for the individuals, and then in turn for those processing the “returns”.

  2. superns says:

    IRS can be outsourced either to India or to Pakistan.

  3. Mark says:

    I suspect IRS is better staffed than you think. I’d love to see a study that benchmarks IRS employee productivity against non-government employee productivity. And if we go to a flat(er) tax, we can eliminate most of the dead wood. Ain’t gonna happen, though, in a government of/by/for the bureaucrats.

  4. Maybe that firs 900,000 is where my son’s tax return went…

  5. Sadie says:

    I truly know it does take an hour or more to speak with IRS & then provided with another telephone number! Letter writing is no help!

    I made a mistake when paying 2012 qtrly tax via EFTPS; went back to adjust and payment processed for the 2nd time!

    Still awaiting refund!

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