IRS “Security” Program Can’t Stop $3.1 Billion Scam
JULY 12, 2016
While it’s absorbed persecuting law-abiding conservative groups the Internal Revenue Service (IRS) can’t seem to stop crooks from scamming it to the tune of several billion dollars in one year alone via bogus tax refunds. It’s the latest of many transgressions at the agency that’s doubled as an Obama administration tool to crack down on political adversaries.
A special IRS security feature called Taxpayer Protection Program (TPP) couldn’t prevent criminals from scamming the agency out of an eye-popping $3.1 billion in one year, according to a federal audit. TPP was implemented to curb an epidemic of identity theft that allows criminals to fraudulently get tax refunds. Supposedly, identity theft fraud is reduced through a verification process but the federal probe, conducted by the investigative arm of Congress, the Government Accountability Office (GAO), found serious loopholes. “TPP uses single-factor authentication procedures that incorporate one of the following authentication elements: ‘something you know,’ ‘something you have,’ or ‘something you are,’” the GAO report states. “TPP’s single-factor authentication procedures are at risk of exploitation because some fraudsters obtain the PII (personally identifiable information) necessary to pass the questions asked during authentication.”
As a result thousands of bogus filers get refunds from the IRS annually, possibly more, the GAO probe found. In fact, investigators determined that the IRS may have doled out an undetermined amount of money to an unknown number of fraudsters so the true figure will never be known. This has been going on for years and the IRS has spent a chunk of change trying to combat it to no avail. In fiscal year 2015 the agency dedicated more than 4,000 full-time employees and spent about $470 million to combat refund fraud and identity theft, the GAO reports. The Obama administration requested an additional $90 million and 491 full-time employees for fiscal year 2017 to reduce improper payments as if throwing more money at the problem will solve it. The reality is that this is part of a much broader security issue at the tax agency. Earlier this year the IRS Inspector General confirmed that hackers gained unauthorized access to 724,000 taxpayer accounts, illustrating that its system is incredibly vulnerable.
The latest GAO audit exposes just one of a multitude of problems at the feared tax agency. Judicial Watch has reported extensively on IRS scandals over the years and has been a leader in uncovering the sordid details of the agency’s witch hunt of conservative groups. Judicial Watch has obtained damaging government records that show the IRS illegally colluded with another federal agency to crack down on conservative nonprofit groups during the 2012 election cycle. The IRS director at the center of the scheme, Lois Lerner, not only broke agency rules—as well as the law—to target conservative organizations, she also lied to Congress in an effort to cover up the wrongdoing.
Judicial Watch has also been a leader in reporting other IRS wrongdoing that’s been largely ignored by the mainstream media. This includes allowing prison inmates to fraudulently receive tens of millions of dollars in tax refunds and illegal immigrants billions by letting them improperly claim tax credits they don’t qualify for. Last summer an embarrassing federal audit exposed the IRS for awarding dozens of tax-delinquent companies with millions of dollars in government contracts. During a two-year period the IRS awarded 57 contracts worth nearly $19 million to 17 corporations that owed federal taxes during that period. This actually violated a 2012 federal law called the Consolidated Appropriations Act prohibiting government agencies from using appropriated funds to enter into a contract with a company that has certain federal tax debt or felony convictions.
As if this weren’t bad enough, IRS employees have been charged with stealing hundreds of thousands of dollars in government benefits, including food stamps, welfare and housing vouchers. IRS employees have also been singled out in various government probes as the federal workers with the highest number of tax delinquents that received bonus pay. A few years ago a federal audit revealed that at the IRS alone, staff members with violations received close to $3 million in awards on top of their regular government salary. Some got the extra cash despite being cited for using drugs, making violent threats, fraudulently claiming unemployment benefits and misusing government credit cards.
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