Lew Leone is the vice president and general manager of WNYW-FOX 5. He is taking to the airwaves with his thoughts on current affairs. It's called "Lew's View." The views expressed are not necessarily those of the station or its employees.
---In this commentary, Mr. Leone talks about the IRS and tax refund fraud:
In 2012 the IRS paid out $4 billion in fraudulent tax refunds.
That is down from the $5.2 billion paid out in 2011 but it is still way too much of our money. Why does this theft continue to happen?
The answer is that it is very easy to steal from the government.
It became very easy to steal from the IRS when they rushed to implement e-filing in 1986. Since then bad guys have been using the IRS as their personal ATM.
Here is how it works. The bad guys steal your identity and obtain your social security number. They e-file a fraudulent return and just make up your total income and withholding and give themselves a refund sent to their address. Given all of the technology in use today you would think that this type of fraud could be easily stopped.
There is a person at the IRS called the national taxpayer advocate and for years she has suggested some easy fixes but the IRS has really done very little.
Here is an example. If I drop my debit card and a bad guy finds it, he cannot use it at the ATM machine because he doesn't have my PIN. The tax advocate recommended using PINs for all e-filers but you guessed it, that didn't happen.
Of the $4 billion in stolen money last year, 655 refund checks went to the same address in Lithuania. Here's a clue IRS. If you get a request for a refund from Lithuania, you probably shouldn't rush to send a check.
This brings up another point. The IRS does not match W-2 earnings, those are the numbers your employee reports to the IRS, to actual returns until May. That is well after the first fraudulent refund checks are sent out.
Last year my identity was stolen and some bad guys received a refund check.
Unbelievably the IRS actually flagged the fraudulent return but still ended up sending money to the thieves.
The IRS is more interested in issuing timely refunds to con artists than it is in helping honest citizens.
Throughout my 7 month ordeal with numerous phone calls to the IRS, they actually made me feel like the criminal.
The IRS claims it has 3,000 people working on the problem of identity theft and they have been patting themselves on the back for preventing more money from being stolen.
Trust me, we shouldn't be thanking the IRS for losing billions of taxpayer dollars.
Ironically, the IRS is adding 2000 employees to deal with Obamacare.
We all know about the billions that are stolen annually through health care fraud. I think it is time to seriously overhaul and simplify the entire tax system. Dramatically downsize the IRS.
Institute a flat tax with no refunds and no returns and we will quickly solve this problem. Too simple?
Let me know what you think.
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