December 23, 2009

THE COUNTRY’S IN THE VERY BEST OF HANDS: IRS Has 70% Error Rate in Issuance of Taxpayer ID Numbers, Resulting in Fraudulent Tax Refunds.

UPDATE: One of my IRS moles thinks there’s less to this than meets the eye:

Not only that, we can’t verify claimed wages and withholding at the time a tax return is processed if the W2’s aren’t provided with the return. This isn’t a secret. We don’t start getting that stuff from the social security administration until june or so after filing season. We do fact check returns as information becomes available to us and some discrepancies do get flagged at processing. We’ve recently begun having folk come in with notices for the 2007 tax year. We’re a small agency and there’s a lot of return-filers. I do sometimes get the idea that as an independent agency, TIGTA is quite comfortable with an adversarial role. Not that there’s anything wrong with that (he said while squinting at the mirror over his monitor…).

If we could verify at time of filing there’d be howls of self-righteous protest from sea to shining sea.

I’d drop the income tax entirely, of course, and solve all these problems.

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