The Internal Revenue Service (IRS) has recently uncovered a significant potential amount of $6.3 billion in identity theft cases, where criminals exploit personal information to file fraudulent tax returns and claim legitimate refunds. The interim results of the 2023 filing season, released by the Treasury Inspector General for Tax Administration on May 10, identified approximately 1.1 million cases as of March 2 that warranted further investigation.
💰💔 The IRS has uncovered a staggering potential $6.3 billion in identity theft cases, where criminals exploit personal information to file fake tax returns and claim legitimate refunds. 😱
Our CEO, Bryan Hornung, shares tips to safeguard yourself against this threat. 🔒 pic.twitter.com/LD8D5wmyEu
— xactitsolutions (@xactitsolutions) May 19, 2023
The IRS has confirmed that out of these identified tax returns, 12,617 were fraudulent, leading to the prevention of $105.3 million in fraudulent refunds being issued. In comparison, during the previous tax year, the IRS identified only 9,626 confirmed fraudulent returns, indicating an increase of approximately 3,000 illegal returns during the 2023 filing period. Continued below the ad…
According to the study, the IRS employed 236 different filters during the 2023 tax filing season, up from 168 filters used in the 2022 tax filing season. These filters encompass reported income and withholding amounts, filing requirements, age, filing history, and prison status, based on false tax returns.
When a tax return is flagged by an agency filter, the IRS suspends processing it until the taxpayer’s identification has been verified, ensuring the integrity of the filing process.
For the year 2023, the IRS expects to collect 167 million individual income tax returns. As of March 3, 2023, the IRS had received 54.9 million tax returns, with 53.6 million (or 97.5 percent) filed online. The IRS has distributed $127.3 billion in tax funds thus far.
According to the study, the agency would employ 236 different filters during the tax filing season of 2023, which is an increase from the 168 filters that were used during the tax filing season of 2022.https://t.co/SilyP3NPT8
— Activist Post (@ActivistPost) May 19, 2023
Recent expert testimony before the Senate suggests that the IRS’s increased enforcement activities are likely to have an impact on small and midsize businesses. Chris Edwards from the CATO Institute testified before the Senate Finance Committee on May 16, explaining that the Biden administration’s promise of no additional tax audits for entities earning less than $400,000 per year applies to “total positive” income, excluding losses.
During the hearing, concerns were raised about the impact of the additional $80 billion allocated to the IRS as part of the Inflation Reduction Act. Senator Chuck Grassley (R-Iowa) questioned Edwards about the administration’s promise, and Edwards confirmed that the IRS’s plan involved assessing income without accounting for losses, potentially affecting mainly small to midsize businesses with adjusted gross income under $400,000.
Edwards also highlighted that the IRS’s accuracy in its assertions during audits is questionable, citing that over the last five years, the IRS has been incorrect in about half of the tax court cases. He stated, “The IRS only got 48 percent of the dollars that it demanded.”
Want to know more? Here you go…
- Identity theft has been a growing problem, and the IRS has stepped up its security measures. Taxpayers can take preventative measures, such as requesting an Identity Protection Personal Identification Number ahead of tax season.
- The IRS flagged more than a million returns for potential fraud, with $6.3 billion in refunds on the line. – CNET
- IRS Flags Over 1 Million Tax Returns For Review Citing Possible Identity Theft – ZeroHedge
Peter Herzog – Freelance Writer for Whatfinger News
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