IRS Releases New Data on ID Theft Fraud
As the IRS continues to fight identity theft-related tax refund fraud, the agency’s Criminal Investigation unit (CI) initiated 776 new investigations into ID theft fraud during the 2015 fiscal year, according to the IRS’s newly released 2015 Data Book. Over the same period—which ran from Oct. 1, 2014, through Sept. 30, 2015—the IRS CI completed 985 investigations (a combination of new and existing cases) related to ID theft fraud, with 774 of those cases referred for prosecution and 211 completed without prosecution. FY 2015 also saw 580 court sentences handed down over ID theft tax fraud, 491 of which included incarceration.
ID theft tax fraud often is discovered through the IRS’s Questionable Refund Program, which detects false returns which may have used stolen identities to claim fraudulent refunds, the agency noted. Additional areas involving ID theft include employment tax cases, abusive return preparer schemes and money laundering investigations, according to the report. Once an ID theft case is discovered, the IRS’s Taxpayer Advocate Service provides assistance to victimized taxpayers. During the 2015 fiscal year, the Advocate Service received 56,174 cases involving stolen identity—the most common issue referred, comprising 24.7 percent of total cases.
As ID theft-related tax fraud has ballooned in recent years and the IRS has seen significant budget cuts, the agency has turned to the private sector, joining with tax preparation software firms, payroll and tax financial product providers, and state tax administrators to launch the Security Summit, which is tasked with identifying and implanting new safeguards to stop tax fraudsters.