IRS takes steps to combat rise in tax fraud, identity theft | Miami Tax ...

Miami is the source of approximately $280 million in illegitimately claimed tax refunds, according to a recently released report by the Treasury Inspector General for Tax Administration, the body that monitors the Internal Revenue Service. The report documents the increase in identity theft and tax fraud and suggests steps that the IRS should continue to take in order to address them.

The report does say, however, that the IRS has already made important adaptations in fighting identity theft. The agency has become more adept at responding to some of the common tax fraud schemes and has changed some of its screening procedures in order to catch more false returns.

Even so, some returns get past the IRS's guard. The TIGTA report included a few notable instances of tax fraud. In one case, an address in Michigan was listed on over 2,000 separate returns, to which the IRS paid over $3 million. The report suggested that $21 billion in fraudulent refunds could be parceled out to identity thieves in the coming five years.

The IRS disagrees with this figure, saying that it has already addressed some of the causes that would contribute to that total. In addition, the agency has stated that it has already prevented approximately $12 million in fraudulent refunds so far this year, with about $6 million of that attributable to detected instances of identity theft.

Some taxpayers may find that their identities have been used to file a fraudulent return. Clearing one's name with the IRS has the potential to be a long process that may require the knowledge of an experienced tax attorney.

Source: Bloomberg Businessweek, "IRS May Lose $21 Billion in Identity Fraud, Study Says," Richard Rubin, Aug. 2, 2012.

? The IRS pursues instances of tax fraud aggressively. If you would like more information about our firm's practice, please visit our Miami tax fraud page.

Source: http://www.miamitaxlawattorney.com/2012/08/irs-takes-steps-to-combat-rise-in-tax-fraud-identity-theft.shtml

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