The Internal Revenue Service says tax refund fraud is expected to soar this year and next hitting $21 billion in 2016 from just $6.5 billion a few years ago. And what is the IRS doing about this? Well, they say they just can’t do much. They claim they need more money if they are to perform the very basic act of ferreting out fraud. They also propose another unpalatable cure: making our tax returns more complicated (is that possible?).
The IRS argues that they do look for some red flags, but they’d need a lot more money to do a really good job on their end.
CNBC reports:
Some obvious red flags—like multiple checks being sent to one address, or multiple deposits being sent to one account or one debit card—are detected, but often refund checks are mailed to those accounts before they're followed up on within the agency, said [an official].
Why will fraudulent payments spike over the next two years? The IRS is blaming cuts to its budget in 2015 that will slow down upgrades to its system.
Indeed, the IRS is full of excuses and as they’ve been complaining for months now.
We have some better suggestions than making our tax returns more complicated (and thus more expensive to have prepared) or giving the IRS more money.
A flat of fair tax would solve the problem by making our tax returns even simpler than they are. Steve Forbes maintains that we should be able to do our tax returns on a postcard.
This tax season is the first time that every American must demonstrate that he/she has healthcare coverage. If not, they face a tax penalty of at least $95 or 1 percent of income. That jumps next year.
If ObamaCare is repealed, the IRS workload would immediately become more manageable.
Meanwhile, the IRS is an agency that rehired staff that had been previously fired for disciplinary reasons. Far worse, they dedicated time and resources to harassing conservative donors and execute a sinister campaign against conservative and Tea Party organizations that sought Tax exemptions. Doesn’t this sound like an agency that could learn to be more efficient?
Instead of whining about less revenue, what about trying an approach that the private companies take when facing challenges to business: pursue efficiency and innovation. Passing the blame is not a solution.