The IRS admitting to fraud isn’t something you would expect, especially around tax season, but according to Forbes, it’s just what they’ve done.
IRS Commissioner John Koskinen stood before the Senate Finance Committee being questioned by Sen. Dan Coats.
“What we learned is that … the IRS continues to process tax returns with false W-2 information and issue refunds as if they were routine tax returns, and say that’s not really our job. We also learned the IRS ignores notifications from the Social Security Administration that a name does not match a Social Security number, and you use your own system to determine whether a number is valid.”
The meeting was based on an entirely different issue that occurred last year when 330,000 taxpayers’ information were stolen through a cyber breach. The IRS managed to stop 1.4 million false returns but $3.1 billion was paid out on fraudulent returns.
“The reality is criminals are becoming increasingly sophisticated and are gathering vast amounts of personal information as the result of data breaches at sources outside the IRS,” Koskinen said.
Koskinen explained that as long as the information was used fraudulently only to obtain jobs rather than to claim false tax returns, the agency doesn’t have an issue overlooking the fraud.
“The question is whether the Social Security number they’re using to get the job has been stolen. It’s not the normal identity theft situation,” he said.
Money Morning reports that Koskinen alluded to even helping undocumented immigrants in the process. “There are questions about whether there’s a way we could simply advise people,” he added. “A lot of the time those Social Security numbers are borrowed from friends and acquaintances and they know they’ve been used… other times they don’t.”
The Washington Examiner also reported that Koskinen stated that the agency is working to determine “the most effective way to do with this without necessarily having people decide not to file their taxes… Obviously, the priority is to have the IRS collecting those taxes.”
“In some cases, there may be a need for statutory authority [from Congress] because we are very sensitive to protecting taxpayer information on both sides,” he added.
Sen. Ron Wyden (D-Ore.) said the IRS needed to beef up the authentication process so that hackers can’t steal information.
[Photo Credit Manuel Balce Ceneta/ AP Images]