Thursday, December 20, 2012
It is my honor to submit this Semiannual Report to Congress summarizing the accomplishments of the Treasury Inspector General for Tax Administration (TIGTA) for the reporting period of April 1, 2012 through September 30, 2012. This report highlights the most notable audits, investigations, and inspections and evaluations performed by TIGTA, as we continue to work diligently to provide oversight of the Internal Revenue Service (IRS) and protect the integrity of Federal tax administration. ...
Increasing voluntary taxpayer compliance and reducing the Tax Gap remain the focus of many IRS initiatives. Nevertheless, the IRS continues to face significant challenges in obtaining complete and timely compliance data and developing the methods necessary to interpret the data. Even with improved data collection, the IRS will need to develop broader strategies and conduct more research to determine which actions are most effective in addressing taxpayer noncompliance.
The IRS has also expanded its efforts to detect and prevent identity theft. However, the impact of identity theft on tax administration is significantly greater than the amount the IRS detects and prevents. TIGTA’s analysis of tax returns using characteristics of IRS-confirmed identity theft has identified approximately 1.5 million tax returns with potentially fraudulent tax refunds totaling in excess of $5.2 billion. TIGTA estimates that the IRS could potentially issue $21 billion in fraudulent tax refunds over the next five years as a result of identity theft.