The IRS caught nearly a million fake tax returns worth $6.5 billion in 2011. Great news, right?
The Journal of Accountancy just said: not really. Pointing to a U.S. Treasury audit, they say the IRS “failed to detect 1.5 million tax returns with potential identity-theft-related fraudulent tax refunds exceeding $5.2 billion for the 2011 filing season.” If all of those were fake, that would mean the government missed almost 45 percent of the fraud.
According to the audit, proven tax-related identity theft doubled from 2009 to 2011. It suggests Americans could collectively be ripped off $21 billion over the next five years. The JoA offers some suggestions to help the IRS out, but here’s what this means to consumers: Keep your records in order and if you expect a refund, file your annual tax return as soon as you possibly can. You may be in a race against a criminal without realizing it.