leskovarlm.com

The Southbourne Tax Group: IRS Making Strides in Detecting Fraudulent Tax Returns

by

jaefombyTIGTA performed an audit to determine how effective the IRS is at detecting and preventing identity theft. The watchdog also looked at how the IRS is measuring undetected identity theft and coordinating identity theft information with other agencies and tax industry partners.

TIGTA identified 568,329 undetected potentially bogus tax returns with refunds totaling more than $1.6 billion for tax year 2013. That’s a drop of more than $523 million from the prior year, the report states.

However, the false reporting of wages and withholding accounts for the largest amount of undetected potentially fraudulent refunds at $1.3 billion. TIGTA believes the new Jan. 31 deadline for employers to file their W-2 forms with the Social Security Administration will reduce this type of fraudulent return.

The new Jan. 31 filing deadline also applies to certain Forms 1099-MISC reporting nonemployee compensation, such as payments to independent contractors.

TIGTA also noted that using states’ lead data during tax return processing could improve detection of identity theft.

TIGTA also discovered that the accuracy of the Identity Theft Taxonomy quantification for both protected and unprotected revenue needs improvement. As an example, the IRS’s estimate of protected revenue was overstated by almost $2.4 billion as a result of the wrong calculation of refunds associated with rejected electronically filed tax returns.

The audit resulted in the following six recommendations, which the IRS agreed with:

1.Expand the use of identity theft models to include all accelerated W-2s to compare with tax returns for possible identity theft.

2.Develop criteria to identify and evaluate potential fraud in tax returns.3.Develop a way to use state lead data to help evaluate tax returns for identity theft.4.Use tax return data to find the refund amount associated with electronically filed tax returns that were rejected when computing revenues, leave out rejected returns that don’t claim a refund, and account for tax returns with multiple reasons for rejection.5.Review revenues to ensure that duplicate tax returns are omitted.6.Tax returns with mismatched income because of amended or duplicate income documents should not be considered for potential identity theft.

The Southbourne Tax Group is a complete-package Accounting & Tax company. We provide a wide selection of small enterprise accounting services, including tax services for businesses and individuals. Our services also include outsourced CFO support, bookkeeping support, local and remote service, payroll processing, QuickBooks support and many more! Our rates are reasonable and you get friendly service from our professional staff.

Our policies and procedures authorize Partners of the Firm for consultation on substantial technical, ethical and industry-wide issues and are also designed to ascertain that customers receive the best financial services available anywhere. The greatest public interest is always at the top of our mind. You can rest assured that our Partners and Staff Members can pinpoint and address all essential issues we encounter.

Our group is considered one of the foremost companies in the locality. By integrating our experiences, expertise and the creative abilities of our staff, each customer benefits from the professional and personal attention they provide.

Our company’s excellent standards, service and specialist staff will make the difference between our unparalleled performance and that of other companies. We assure every customer of being provided the expert service of our entire company.

Article Source:

eArticlesOnline.com}