Identity Thieves Get $4 Billion in Tax Refunds

Posted by Chris Chaney on Friday, November 8th, 2013, 5:01 PM PERMALINK

What a week it’s been for everyone’s favorite neighborhood bureaucrats at the IRS; first we learned that volunteers had been incorrectly preparing tax documents, and now we learn that the IRS awarded four billion dollars to criminals. And who could forget the revelations that the IRS had targeted conservative organizations for extra scrutiny. There’s one theme to all these incidents: incompetence.

Why should we be surprised? The IRS represents everything bad about Big Government, a bloated agency that is mismanaged and a threat to taxpayers. Despite what Harry Reid thinks, no one likes to pay taxes, but Americans especially do not like to pay taxes when they know their hard earned income is given to criminals. This is simply inexcusable.

The inspector general’s report will attempt to assuage concerns by noting that last year they prevented $12 billion in fraudulent tax refunds from going to identity thieves. But what will be buried in a foot note is the fact that the amount refunded to identity thieves increased by $400,000 million from last year! Clearly, the IRS is aware identity theft is problem, yet they don’t seem to be getting any better at stopping it. Shocker.

It’s worth noting that over 600 fraudulent returns were sent to a single address in Lithuania. Does the IRS really think that over 600 American citizens live in the same Lithuanian house? One would expect that some sort of algorithm would have picked up on this, but then again the government isn’t very good at building websites. Not only did the government fail at building the Obamacare website, it contains serious flaws that are ripe for fraud.

The time has come for meaningful tax reform that fundamentally changes how the IRS does business. No more political targeting, no more fraudulent tax refunds. ATR’s Grover Norquist and Patrick discussed the need for reform in their latest Reuter’s column. The American people deserve to know that if money is going to be taken from their paychecks, it will not be sent to criminals.