Lawmakers In House, Senate Investigating Fraudulent Returns Filed With TurboTax
TurboTax temporarily put a hold on filing all state tax returns due to reports of fraudulent activity in Minnesota, Utah and other states.
The probes from lawmakers in Congress will seek to understand how criminals are raking in billions of dollars on fake refunds. The federal government lost an estimated $5.2 billion in the 2013 filling season due to fraud, reports the Wall Street Journal, and that was despite new IRS screening methods.
Intuit has said it doesn’t think its system was breached, so it’s up to federal investigators and officials to try to figure out how widespread the fraud issues are and how it was done, an insider tells the WSJ.
In the meantime, top lawmakers are joining the fray with their own probes: Senate Finance Committee Chairman Orrin Hatch of Utah has said his panel is going to take a closer look into the incidents, calling the news of fraud “troubling.” The issue is likely going to be examined at a hearing planned for next month on tax scams.
Over in the House, the Ways and Means Committee is also probing the incidents and thus far has held bipartisan discussions with IRS and Intuit.
What steps might Congress take to remedy the problem? Perhaps starting the tax filing season later in the year, posits the WSJ, or taking longer time to process refunds. Part of the issue for the IRS is that the federal government receives wage information from employers in spring, much later than workers do. So when employees go to file tax returns, the IRS doesn’t have the employer information to check against.
That might be a hard row to hoe though, as some payroll firms and other employers have argued in the past that getting that data to the IRS sooner in the year would be too burdensome. It also might cost the IRS more to speed up the process of matching employer and employee data before issuing returns.
Congress Starts Its Own TurboTax Probes [Wall Street Journal]
Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.
