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Embroiled itn what appears to be the makings of yet another scandal, the IRS will be the subject of a hearing held by the House Oversight and Government Reform Subcommittee on Government Operations this coming Friday morning. Over the past five years, the cases of identity theft related to tax fraud has increased by a staggering 413% and these are only reported cases. Someone has some 'splainin' to do.
“Drug dealers are turning to IRS identity theft because it’s less risky and more lucrative. There are 78% more incidents this year than last year,” said Chairman Mica. “This is not a ‘phony scandal’- this is a real problem costing taxpayers billions and the Administration is failing to act.”
Currently, The Treasury Inspector General for Tax Administration is estimating current fraudulent payouts in excess of $5 billion, but says that if the IRS continues to ignore the problem, taxpayers could be looking at $21 billion of their hard earned cash being paid to fraudsters.
Just as problematic as the monetary waste is the IRS' failure to pursue tax fraud in these instances. According to an annual report published by Taxpayer Advocate Service:
Organized criminal gangs have found ways to steal the Social Security numbers (SSNs) of other taxpayers, file tax returns using those taxpayers’ names and SSNs, and obtain tax refunds. Then, when the real taxpayer files a return claiming the refund, that return is rejected and the victim cannot get his or her refund. To compound the problem, because the IRS takes more than six months, on average, to resolve stolen identity cases, many victims are left exposed to identity theft-related problems the following filing season.
Factor in that only two out of three calls to the IRS actually results in interaction with a human and not the automated system, and you can imagine the nightmare victims of identity theft tax fraud face. Currently, the IRS has no efficient means of pursuing fraudsters. This is likely due to the fact that there are twenty-one separate divisions in the IRS that deal with identity theft. Streamlined and efficient, just like the rest of the federal government...
As if anyone needs reminding that this is the same entity that targeted liberty and Constitutionally oriented groups, much less that this is the department designated to oversee our health care. How much fail will Washington tolerate before serious, substantial action is taken to reform entities like the IRS?