• Watchdog group says IRS could issue $26 billion in fraudulent refunds

    By: Tenikka Smith

    Updated:

    CHARLOTTE, N.C. - A watchdog group told members of Congress Tuesday that the Internal Revenue Service will give out $26 billion in fraudulent tax refunds in the next five years.

    The report, presented by the Treasury Inspector General for Tax Administration, paints a grim picture of the staggering problem of identity theft involving taxpayers. 

    It's a problem Charlotte resident Dolores Guy is all too familiar with.  After electronically filing her taxes back in February, Guy said she learned someone had already filed in her name. 

    "It has a big impact on your life, and it's a fearful thing to know that someone knows that much about you," Guy said.

    The watchdog group also found the IRS doesn't deal with fraud cases in a timely fashion, sometimes taking more than a year to resolve them.  Guy said she is lucky.  Her real refund was processed in late April.

    The IRS has refuted the group's findings. 

    "The IRS believes that the five-year estimate is far too high,” spokesman Mark Hanson said. “The estimate was based on 2010 figures, which took place before the IRS instituted major changes with the way it handles identity theft cases."

    The IRS also pointed out the steps it is taking to deal with fraud, which include implementing new processes for handling returns, adding new filters to detect fraud and using new initiatives to investigate suspects.

    Guy said she's glad the IRS is taking steps to deal with the growing problem and relieved there is a group determined to hold them accountable in the process.

    "I'm very glad to know about that, and I wish there was something I could do to help them be watchdogs," Guy said.

    The IRS also said it's taking steps to address the concerns over customer service by working to have faster case resolution, providing more training for employees and offering more education for taxpayers.

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