Treasury Inspector General for Tax Administration
November 1, 2011
TIGTA - 2011-75
Contact: Karen Kraushaar
WASHINGTON – The Internal Revenue Service (IRS) timely processed the majority of individual tax returns during the 2011 filing season according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
This finding is part of TIGTA’s review of the IRS’s performance during the 2011 Filing Season. The IRS received 130.7 million individual income tax returns and issued approximately 98.2 million refunds totaling $277.1 billion.
The IRS also increased the number of erroneous refunds it detected and stopped. As of April 30, 2011, the IRS identified 775,723 tax returns with $4.6 billion claimed in fraudulent refunds and prevented the issuance of $4.4 billion (96 percent) of those fraudulent refunds. This represents a 171 percent increase in the number of fraudulent returns identified during the same period in 2010. The IRS also selected 199,854 tax returns filed by prisoners for fraud screening, which represents a 256 percent increase compared to last year.
However, the IRS was unable to identify 140,596 taxpayers who erroneously claimed $140.2 million in tax credits due to processing errors. TIGTA identified several problematic credits which include: the First-Time Homebuyer Credit; the Adoption Credit; the Nonbusiness Energy Property Credit; and the Plug-in Electric and Alternative Motor Vehicle Credit.
“Overall, the IRS’s performance during the 2011 filing season has been successful. The IRS continues to face challenges relating to First-Time Homebuyer Credit repayments, verification of the Adoption Credit, and several energy-efficiency tax credits,” said J. Russell George, Treasury Inspector General for Tax Administration. “I am pleased, however, that the IRS plans to seek math-error authority for several credits that we have found to be problematic,” Mr. George added.
TIGTA made 14 recommendations to the IRS. The most significant recommendations were that the IRS:
The IRS disagreed with only two recommendations involving the First-Time Homebuyer Credit.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA’s internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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