Unbelievable

[Christian]

With all of us fretting over the proper application of tax laws and splittings hairs over rule interpretations

I was surprised at what i saw on 60 Minutes last night. After years of hearing efile ballyhooed by the Service touting instantaneous matching of taxpayer records with their returns when filed I find that it was as like as not a farce. The Service is paying out billions in fraudulent refunds by paying them BEFORE any record matching on a taxpayer's return is done. An individual who reportedly ripped off some millions of dollars explained how easily it can be done. You have to wonder why this guy is being interviewed by 60 Minutes instead of being in prison. In China he would have been executed. With all this crap going on is there any wonder the public has no problem with cheating if they can ?

[Randall]

The tech stuff may have us all wowed into thinking we can solve all our problems.  The problem is us.

[KINGCHUCK1971]

Keep in mind that criminals advance their skills just like technology advances. If they want something bad enough they will always find a way. It kind of sucks because if they put forth that same effort towards a positive lifestyle. They would be quite successful at whatever they choose to do.

[NECPA in NEBRASKA]

I just read today that now they are trying to get the IRS to change the due date for W-2s from employers to 1/31 and drop the efile requirement to at least 10 W2s from 250. 

[Jack from Ohio]

I just read today that now they are trying to get the IRS to change the due date for W-2s from employers to 1/31 and drop the efile requirement to at least 10 W2s from 250.

Unless they stop trying to issue refunds at light speed, none of those changes will deter the fraudulent returns at all. It takes time to verify. Americans have become spoiled with high speed refunds which has thrown open the door for the fraudulent returns. Make the standard refund time 6 weeks.

[easytax]

Unless they stop trying to issue refunds at light speed, none of those changes will deter the fraudulent returns at all. It takes time to verify. Americans have become spoiled with high speed refunds which has thrown open the door for the fraudulent returns. Make the standard refund time 6 weeks.

 

Agreed!   If congress wants to do the correct thing ---- make all reporting required by January 31 (even February 15) for everybody (business and personal) and everything. Then have the tax season begin two - three weeks later. The matching should then be there, the fraud should be lessoned and so on.

 

Also, make congress make the rules/law for the tax year at a minimum a year before (anything required/changed for 2014 had to be done prior to December 31, 2012; 2015 done, etc. prior to December 31, 2013 - and so on). That way, everyone involved has time to implement the needed/required forms, requirements, etc. Business knows what to expect and can plan properly. The same for us as practitioners and for the people we serve.

 

The answer is actually easy --- it just takes guts and doing the correct thing --- over gaining power and re-election for themselves.

[Catherine]

<snip>

The answer is actually easy --- it just takes guts and doing the correct thing --- over gaining power and re-election for themselves.

 

Ah, that's why it won't happen.  Power and re-election for themselves is ALL the various legis-vermin care about.  Even the ones who went to DC as "reformers".  Remember that tax cheat Rangel was the anti-corruption candidate who unseated Adam Clayton Powell.  Back while I was still learning to read...

[SaraEA]

Christian, "instantaneous matching of taxpayer records" means name, Soc Sec number, and birthdate, which are instantaneously matched with Soc Sec records.  That's why you get such quick rejects when someone else has already claimed a child or filed a return for the same taxpayer.  At least IRS does prevent taxpayers from filing twice.  Matching with income reporting is done way after tax season ends.  The last IRS commissioner was on a mission to get "real-time" matching, but he and Lois Lerner have both retired.

 

And Jack is right, the focus on "light speed" refunds has made all the fraud possible.  The IRS began to advertise quicker refunds in an effort to get people to efile.  Well, efile has caught on, and the agency is way ahead of its goals for percent of individual returns efiled (still have a way to go for entities).  They don't have to convince anyone to efile any more.  So move up the date for payer reporting to Jan 31 or Feb 15 and don't issue any refunds until March or April so the numbers can be matched.  How hard is that?  Politically it may be too hard.  The people who get the big refunds file early, need their money NOW, and are most likely to get refundable credits.  It would sound awful if Senator or Rep. So and So approved delaying poor people their refunds, even if many of these people never vote.  And of course the law would have to be changed so the IRS doesn't have to pay interest on refunds paid more than 60 days after a claim is filed.

 

Someone is power has to muster the courage to just do it.  Their defense that it will prevent billions of dollars in fraudulent refunds might just catch on with the electorate.