IRS Fights Identity Theft

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In an effort to prevent identity theft, the Internal Revenue Service has flagged almost 2 million tax returns for possible fraud, Deputy Commissioner Steven Miller told a U.S. Senate subcommittee.

“The IRS is confronted with the same challenges as every major financial institution in preventing and detecting identity theft,” Miller said. “We cannot stop all identity theft. However, we are better than we were, and we will get better still.”

Last year, the agency prevented the issuance of $14 billion in fraudulent refunds, Miller said. This year the IRS improved its efforts, adding hundreds of employees dedicated to anti-fraud, and has implemented new filters that flag questionable returns.

When the IRS takes additional time reviewing returns before issuing refunds, legitimate refunds are delayed, said Nina Olson, the national taxpayer advocate. When the IRS tries to expedite returns, fraudulent refunds are issued. “There is no way around these trade-offs.”

To contact the reporter on this story: Lindsey Grossman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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