The IRS Refunds Identity Thieves

You know how few mistakes the government makes. Very rarely does anything ever slip past them. They are renowned for their frugality and their efficiency in every aspect of everything. That must be why they are so eager to run our lives - not really. rnIn the latest unbelievably pathetic report of government mismanagement is the recent discovery that the Internal Revenue Service might have accidentally handed over $5 billion in refund checks to none other than identity thieves. rnOver the course of the next five years, $21 billion could find its way to the wallets of identity thieves who filed fraudulent tax returns back in 2011. But, you will be happy to know that even though the IRS screwed up big time, they are seeing significantly less fraudulent tax refund claims than actually happen according to a government audit that cautioned the incident might cause the American people to lose faith in the tax system.rnLast year, the IRS detected somewhere around 940,000 fraudulent returns claiming $6.5 billion in refunds. It is also believed that there were an additional 1.5 million cases that went undetected. It is likely that these undetected cases were of thieves stealing the identities of children, dead people, or other people who would not normally file a tax return.rnTo give you an example, there was one case in Michigan where investigators found that one address was used to file 2,137 tax returns. What is more is that instead of investigating the strange event, the IRS went ahead and decided to issue $3.3 million in refunds to the address. rnIn Florida, three different addresses were used to file 500 returns, each address receiving $1 million in refunds. That incident was actually the center of the identity theft crisis.rnThere were also reports of countless refunds being deposited into one bank account. Apparently the circumstance was not fishy enough to warrant the IRS investigators to put too much time into it. Identity thieves trying to file refunds for several people tricked the IRS into forking over 590 refunds reaching a grand total of $900,000 into one account.rnOne excuse that is being made for the IRS is that with so many Americans suffering and having trouble paying their bills, the IRS is taking a lot of heat. They are trying to get people their tax returns. After all, isn’t the IRS known for its tender-heartedness?rnTaxpayers start filing their tax returns in mid-January. But employers and financial institutions don’t have to file their documents for taxpayers until the end of March. Thus, the IRS does not always have time to check taxpayer return information before it issues refunds. That sounds more like a government operation.rnIn an effort to combat the fraudulent returns, the IRS is putting some new steps into play. They are utilizing a new ID theft screening process that caught $1.3 billion in potentially fraudulent claims in April, and they have another system that will attempt to catch files being made by dead people. For everyone’s sake except the identity thieves, let’s hope these measures actually work.