Identity Thieves Cheated IRS out of $5.8 Billion…in One Year

Monday, February 23, 2015
(photo illustration: Steve Straehley, AllGov)

The Internal Revenue Service was duped into paying nearly $6 billion to identity thieves in just one year, and it could have been a lot worse.


The $5.8 billion that the IRS paid to fraud perpetrators in 2013 represented just 20% of all the phony returns it received, according to a report (pdf) by the Government Accountability Office (GAO). In other words, the agency caught and rejected about 80% of the returns sent in by identity thieves.


But doing better than that will be difficult, IRS officials contend, unless it gets more funding from Congress. Lawmakers, particularly Republicans, have been more interested in slashing the IRS budget than restoring it.


 “Since 2010, the agency has absorbed approximately $900 million in budget cuts while also facing an increasing workload due to legislative mandates, priority programs…and [identity theft] refund fraud,” the GAO wrote in its report.


The IRS asked for nearly $65 million more in funding for fiscal year 2015 to combat identity thieves and fraud. Lawmakers responded by taking another $346 million out of the IRS budget, pushing the total in cuts over the past five years to $1.2 billion, according to Eric Katz of Government Executive.

-Noel Brinkerhoff


To Learn More:

Identity Theft and Tax Fraud: Enhanced Authentication Could Combat Refund Fraud, but IRS Lacks an Estimate of Costs, Benefits and Risks (Government Accountability Office) (pdf)

IRS Paid Identity Thieves $5.8 Billion in 2013, Blames Budget Cuts (by Eric Katz, Government Executive)

FTC Logs more than $1.6 Billion in Fraud Complaints in One Year (by Steve Straehley, AllGov)


jaxon 9 years ago
Funding from congress?!!! They are not part of the Government, get rid of the illegal IRS!
SNNN 9 years ago
IRS is a the collection arm of the Fed. UNDERSTAND this reality....your check goes to a mob of private banksters who own the Fed. Look up the status of the Fed as ruled by our very own Courts in law cases.
Anonymous Coward 9 years ago
The deck is stacked against the middle class worker. So it's inevitable that they should question why they should pay all of the taxes levied against them when major corporations and the wealthy can avoid paying anywhere near the same tax rates That would be foolish. They would be subsidizing the very people who often impoverish them, sell them tainted foods, sell them antidepressants that make them feel worse, force them to pump poisonous vaccines into their children and risk making them autistic, who let illegals flood into the country to take jobs so corporations can be more competitive internationally and profit more, etc. etc. etc. Only an idiot would not think about avoiding paying taxes if they could get away with it.
TJ 9 years ago
The IRS is a private corporation! They steal every penny they get, so turn-about is far play! If they can steal from us, then why should we steal from them?

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