Bookkeeping Services in Miami Tax Fraud Undetected by IRS

Bookkeeping Services in Miami Tax Fraud Undetected by IRS

Bookkeeping Services in Miami note that identity theft is having a much larger impact on tax administration than the amount the Internal Revenue Service detects and prevents, according to a new report.

The report shared by Bookkeeping Services in Miami  VieraCPA, noted that the IRS reported that it detected 938,664 tax returns totaling $6.5 billion in fraud for processing year 2011 tax returns. Using the characteristics of confirmed identity theft, TIGTA identified approximately 1.5 million additional undetected tax returns with potentially fraudulent tax refunds totaling in excess of $5.2 billion by Bookkeeping Services in Miami . TIGTA estimates that the IRS could issue $21 billion in fraudulent tax refunds over the next five years.

The IRS has expanded its efforts to detect and prevent identity theft by Bookkeeping Services in Miami , but added that the report found multiple reasons for the IRS’s inability to detect billions of dollars in fraud. As identity theft is the most frequent consumer complaint, and at a time when every dollar counts, these results are extremely troubling. Undetected tax refund fraud by Bookkeeping Services in Miami results in significant unintended federal outlays and has the potential to erode taxpayer confidence in our nation’s system of tax administration.

TIGTA initiated its audit at the request of the chairman of the Senate Finance Committee’s Subcommittee on Fiscal Responsibility and Economic Growth. The overall objective of the review was to evaluate the effectiveness of the IRS’s efforts to identify and prevent fraudulent tax refunds resulting from identity theft.

The reasons TIGTA found that the IRS did not detect billions of dollars’ worth of identity-theft-related tax refund fraud by Bookkeeping Services in Miami include delayed access to third-party income and withholding information.

These delays make it difficult for the IRS to detect fraudulent tax refunds at the time tax returns are processed. Third parties are not required to submit income and withholding documents to the IRS until March 31, yet taxpayers can begin filing tax returns in mid-January.

The report also found that the IRS has not developed processes to obtain and use the third-party information that is available at the time tax returns are filed. The use of direct deposits, including debit cards, to claim fraudulent tax refunds increases the risk that the IRS will not detect identity theft. The IRS continues to allow multiple direct deposits to the same bank account.


By Gustavo Viera

Gustavo A Viera, CPA, is the managing partner in Gustavo A Viera, PA, CPA. His experience spans more than 25 years. His public accounting experience includes a senior audit manager at PriceWaterHouseCoopers with a focus in the healthcare industry, and Chief Financial Officer of Hewlett Packard Latin America and Telefonica of Spain. Gus also writes a blog twice a week that addresses issues his clients have at He has also taught in the SBA program in Miami FL, and is admitted to practice in the State of Florida licensed Certified Public Accountant. Gus welcomes questions and he can be reached at Gustavo A Viera, PA, CPA, One Alhambra Plaza Floor PH Coral Gables FL 33134 (786) 250-4450.