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Report: IRS ID Theft Prevention System Good, but Could Use Improvement

By:
Chris Gaetano
Published Date:
Jan 29, 2016
irs-small-3While IRS security protocols intercept their fair share of identity theft attempts, a recent report from the Treasury Inspector General for Tax Administration (TIGTA) said a better net could catch more. The IRS piloted its Return Review Program (RRP) in 2014, and while the automated system has identified fraudulent returns other systems missed, the TIGTA said the RRP itself missed thousands. "TIGTA's analysis also showed that 54,175 confirmed identity theft tax returns with refunds totaling more than $313 million were identified by other existing fraud detection systems, but were not selected by the RRP." The IRS, in response, said this was because the system, which has not been fully implemented, was piloted to only look for new identity theft schemes that other programs could not detect, so its full capabilities were not deployed. TIGTA noted using RRP in combination with existing fraud detection systems produced the most results. 

TIGTA recommended that the IRS improve the RRP system before using it to replace current programs, which means making it able to detect not only the new types of schemes but the others it could not. The IRS agreed with this recommendation, and told TIGTA it was already working on it. 

"The IRS agreed that the retirement of existing systems should not compromise or reduce its ability to detect potentially fraudulent tax returns. The IRS's plans for bringing the RRP to full functionality and replacing the fraud and identity theft detection function of the EDFS and DDb call for improving overall detection on performance, not reducing or otherwise compromising it. Consequently, the IRS believes its plan adequately addresses the intent of the recommendations and plans no additional corrective action," said the report.