TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Wednesday, December 29, 2010

IRS Lacks Internal Controls to Monitor $700m of Tax Refunds to Nonresidents

TIGTA The Treasury Inspector General for Tax Administration today released Improvements Are Needed to Verify Refunds to Nonresident Aliens Before the Refunds Are Sent Out of the United States (2010-40-121):

Individuals who are nonresident aliens of the United States, but who receive U.S. source income from a U.S. trade or business including wages, commissions, interest, dividends, pensions, gambling winnings, etc., report and pay taxes on that income on U.S. Nonresident Alien Income Tax Returns (Form 1040NR).  This income is also subject to income tax withholding.  Nonresident aliens also file Form 1040NR to request refunds of amounts over withheld.  There were approximately 598,000 Tax Year 2008 Forms 1040NR processed in 2009. Total tax withheld on these returns amounted to more than $2.4 billion and refunds amounted to more than $712 million. ...  [A] judgmental sample of Tax Year 2007 and 2008 returns revealed significant control weaknesses in the processing of refunds claimed on Forms 1040NR. ... [A]dditional steps are necessary to ensure that questionable refunds claimed on Forms 1040NR are identified and stopped prior to issuance.

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Where do I sign up to become an illegal alien? I mean, low taxes, no scrutiny of tax returns, voting without proof of eligibility, etc.

It's getting to the point where it's not that great a deal to be an actual citizen.

Posted by: Dr. K | Dec 29, 2010 11:49:47 AM

Does this work in if Americans moved illegally into Mexico?

Posted by: Woody | Jan 1, 2011 8:43:11 AM