The Treasury Inspector General for Tax Administration (TIGTA) has made public a report on the performance of the IRS in the recently-concluded tax filing season. In the report, TIGTA says that due to the continued budget cuts, the IRS is depending more upon technology-based services. However, the report says, the agency has improved its fraud detection methods.
Since 2010, the IRS has faced budget cuts of up to 18 percent, after adjustments for inflation. Lack of funds forced the agency to reduce its workforce and scale down employee training programs. This has made the IRS insufficient to provide efficient service to taxpayers.
Considering the magnitude of the IRS workload, their complaint about a lack of funds may not be entirely unfounded. They received more than 66.7 million tax returns as of March 6, 2015. More than 62.3 million (93.5 percent) were filed electronically and more than 4.3 million (6.5 percent) were filed on paper. The IRS has issued more than 54.2 million refunds totaling more than $162 billion.
As of February 26, 2015, the IRS processed 737,148 tax returns that reported more than $2.1 billion in Premium Tax Credits. More than 3.7 million tax returns reported shared responsibility payments.
Regarding the tax refund fraud, the IRS said that it identified 36,674 tax returns with $172.9 million claimed in fraudulent refunds, as of March 7, 2015. They also prevented the issuance of $132.8 million (76.8 percent) in fraudulent refunds.
The IRS uses controls to identify fraudulent refund claims before they are accepted into the processing system. Using this method, the IRS identified about 37,000 electronically-filed fraudulent tax returns and about 10,000 paper tax returns, as of March 5, 2015.
The IRS also identified and confirmed 16,523 fraudulent tax returns involving identity theft as of February 28, 2015, and identified 26,797 prisoner tax returns for screening as of March 7, 2015.
Unlike in its other reports, TIGTA did not make any recommendations for changes or proposed improvements.