The income tax filing deadline for 2023 has come and gone and the stats are tallying up to show what the Internal Revenue has processed for the year in returns. One statistic that stands out- according to the U.S. Department of the Treasure, that as of March 22, 2023, the IRS has flagged over one million tax returns for potential identity theft for the 2023 tax season. The associated refunds to these flagged returns are worth about $6.3 billion. The numbers are still rolling in, as this report is based on returns filed for the first half of the tax season! We are just getting started!
Identity theft was the most prevalent type of fraud that consumers reported to the Federal Trade Commission in 2022 but it is an issue that the IRS has been combating for a long time. In the hopes to prevent fraudulent payments this year, the IRS increased the number of filters it uses to identify potentially fraudulent tax returns, from 168 filters last year to 236 this year. The result being a record number of potential fraudulent returns. The IRS had confirmed so far from the flagged returns, that 12,617 of them were fraudulent. That figure is up from 9,626 tax returns at the same date in 2022.
Good news and bad news all around. Good news that the IRS is working hard to prevent fraudulent payments. Kudos to them. The numbers of attempted fraud and potential financial loss are shocking. These flagged returns identified as fraudulent are pulled from processing until the IRS can verify the taxpayer’s identity. Sometimes, the system inadvertently catches returns that aren’t fraudulent, though. So, the bad news is that those people won’t get their return until further investigation proves the accuracy of their tax returns.
Today’s Fraud Of The Day is based on article “More than 1M tax returns flagged for potential identity fraud: IRS” published by The Hill on May 17, 2023
More than 1 million tax returns have been flagged for potential identity fraud with more than $6 billion in refunds requiring additional review, according to the IRS.
An interim report on the 2023 tax filing season that the IRS composed last week and publicly released Tuesday states that the agency identified almost 1.1 million returns that need to have additional review because of identity theft filters, as of March 2. The IRS confirmed 12,617 returns to be fraudulent, preventing $105.3 million in refunds from being distributed.
