Aug 23

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Another example of IRS Mismanagement

Fraudulent Individual Taxpayer Identification Numbers (ITINs) are used to obtain illegal and fraudulent tax refunds. This occurs under our current tax code because of the number of refundable credits that currently exist. For an example and additional explanation, see Audit Report Discloses $4.2 Billion Annually Is Paid To Illegal Aliens through A Refundable Tax Credit, With Practically No Offsetting Tax Revenues.

The Treasury Inspector General for Tax Administration (TIGTA) released a report earlier this month which address this continuing problem. The TIGTA audit report states:

This audit was initiated because TIGTA received IRS employee complaints referred from members of Congress alleging that IRS management responsible for overseeing the ITIN operation was encouraging employees to assign ITINs to applicants when the ITIN application was fraudulent. … TIGTA substantiated many of the allegations set forth in the IRS employees’ complaints. The complaints alleged that IRS management is not concerned with addressing questionable applications and is interested only in the volume of applications that can be processed, regardless of whether they are fraudulent.

The audit found that the ITIN application review and verification process is so deficient that there is no assurance that ITINs are not being assigned to individuals submitting questionable applications. Because of lax documentation requirements to obtain an ITIN, tax fraud can go undetected.”

Congress and the Administration is focusing insufficient attention collecting taxes that are already legitimately owed.


About the author

David Nolte

I am a founding principal of Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I am a Certified Public Accountant (CPA) and an Accredited Senior Appraiser (ASA), as well as having other professional credentials. I regularly serve as an expert witness involving damages measurement. My litigation-oriented resume is on Fulcrum's website.

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