A single address in Lansing, Michigan was used to file 2.137 tax returns, leading to more than $3.3 million in refunds. And that just scratches the surface…
According to recent reports by the Treasury Inspector General for Tax Administration (TIGTA), the IRS may have issued more than $5 billion in tax refunds in 2011 to fraudsters who assumed the identity of the deceased, children, or others who normally wouldn’t file a tax return. Treasury Department investigators also estimated that another $21 billion could be refunded to identity thieves over the next five years.
Despite the IRS continuously increasing its efforts to fight tax fraud, identity thieves appear to be one step ahead. 938,664 fake tax returns were detected by the IRS during the 2011 processing year, but another 1.5 million cases of tax fraud remained undetected, as reported by TIGTA.
One of the biggest concerns for the IRS is the lack of timely access to information that could help them verify valid tax returns. In the most extreme cases, like the Lansing, Michigan, identity thieves used the same address to file hundreds or even thousands of potentially fraudulent returns.
For more insights, read the full report.
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