Tag Archive for Whistleblower
After it was learned that thousands of identity theft ‘Information Referrals’ reported on IRS Form 3949‑A were not being processed the Treasury Secretary General for Tax Administration (TIGTA) investigated and published a report (#2012-40-106) essentially stating that the “process for individuals to report suspected tax law violations is not efficient or effective.” It seems to in fact have lead to identity theft victims being ignored.
Basically the problem as far as I can tell is that IRS Form 3439-A should NOT be used for both blowing the whistle on a tax cheat and also as a means for identity theft victims to report their status to the IRS. Here are twelve highlights directly from the report:
1. The IRS website for reporting fraud was visited 501,218 times in Fiscal Year 2011, and during that year 116,307 individuals submitted a Form 3949‑A, Information Referral, to the IRS.
2. About 3,000 Forms 3949‑A used to report identity theft were destroyed due to a lack of procedures on how to process these claims. Victims were not notified.
3. Reporting guidelines provided to taxpayers and employees are confusing and inconsistent and cause individuals to use Forms 3949‑A for other than its intended purpose. This creates a burden on both the individuals and tax administration.
4. A lack of oversight and effective procedures has resulted in workable Forms 3949‑A, including identity theft claims, being destroyed without any acknowledgement of receipt to the taxpayer.
5. Reporting guidelines provided to taxpayers and employees are confusing and inconsistent.
6. Instructions on Form 3949‑A do not explain what types of fraud and tax law violations to report using this form. As a result, individuals often use Form 3949‑A for purposes other than reporting suspected tax fraud or tax law violations.
7. Because Form 3949‑A lacks specificity, taxpayers do not always provide the IRS with sufficient information for the IRS to take action.
8. The IRS routes identity theft referrals received on a Form 3949‑A as regular correspondence, which delays actions from being taken on identity theft cases.
9. Many referrals do not meet any criteria under which the IRS could or would be able to take action(s).
10. A lack of quality review resulted in referrals being destroyed.
11. The forms are often used for other purposes (e.g., claims by victims of identity theft).
12. Ineffective routing procedures and oversight have allowed Forms 3949-A to be mis-routed to the wrong functions. Others are mistakenly considered unworkable and retained for 90 days and then destroyed.
I opened another file today involving a taxpayer that got scammed by the person who prepared his 2011 tax return. In this scheme the promoter claimed the taxpayer could get a tax refund based on the American Opportunity Tax Credit even though she was not enrolled in or paying for college. Unbelievable! I almost feel out of my chair ….. again!
What I learned from sources inside the IRS is that con artists have been falsely claiming that refunds are available even if the taxpayer went to school ten years ago and more. To avoid falling victim to these POND SCUM, I’m restating below what the IRS sent to me, to be aware of any of the following:
Fictitious claims for refunds or rebates based on false statements of entitlement to tax credits.
Unfamiliar for-profit tax services selling refund and credit schemes to the membership of local churches.
Internet solicitations that direct individuals to toll-free numbers and then solicit social security numbers.
Homemade flyers and brochures implying credits or refunds are available without proof of eligibility.
Offers of free money with no documentation required.
Promises of refunds for “Low Income – No Documents Tax Returns.”
Claims for the expired Economic Recovery Credit Program or for economic stimulus payments.
Unsolicited offers to prepare a return and split the refund.
Unfamiliar return preparation firms soliciting business from cities outside of the normal business or commuting area.
It’s the same old story. The tragic part is that scams like this always seem to target the most vulnerable in society and it makes me sick every time…