Free Markets, Free People

IRS sent 5 billion, with a “B”, to identity thieves

If you’re not very confident in government competence to begin with, this story should add fuel to that fire:

Investigators say the Internal Revenue Service may have delivered more than $5 billion in refund checks to identity thieves who filed fraudulent tax returns for 2011.

They estimate that another $21 billion could make its way to ID thieves’ pockets over the next five years.

$5 billion.  $21 billion in 5 years if the ID thieves can’t be rooted out prior to sending the checks. 

Surely they have a way of doing that.  There have to be simple checks like, oh, I don’t know, an address getting more than one return hoisting a red flag maybe?   Or maybe a single bank account receiving more than one return?

For example, investigators found one single address in Michigan that was used to file 2,137 separate tax returns seeking a total of more $3.3 million in refunds. In other cases, hundreds of refunds were deposited into the same bank account.

Guess not.  Guess these new fangled computers and programming security checks are just beyond them (such a system would likely cost much less than $5 billion, huh?).

IRS incompetence costs you $5 billion.   Add that to the $60 billion a year in Medicare waste, fraud and abuse, and we’re talking real money.  And then just imagine all the other waste, fraud and abuse throughout the rest of the federal government and it isn’t at all difficult to understand why we constantly find ourselves in a deficit situation.  Or why government, in the form of the Obama administration is raising taxes on everyone (see ObamaCare and the new Medicare tax) and wanting to raise them on the “rich” segment of the society.

So it can give it away to ID thieves and Medicare fraudsters, among other grifters.

[HT: Jamie Dodge]


Twitter: @McQandO

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9 Responses to IRS sent 5 billion, with a “B”, to identity thieves

  • Hey, dude, it isn’t like it’s OUR money or nothin’…

    See, here’s the nut of the problem; the IRS HAS $5 billion to GIVE to any-FLUCKING-body. right/wrong/or indifferent.
    The IRS SHOULD be a tiny fraction of what it is, and should NEVER be tasked with REDISTRIBUTION, and NEVER have any surplus funds BECAUSE it only collects taxes mandated by a very simple, rational system that ONLY takes what a limited central govt. NEEDS to perform its minimal duties.

    • bu….bu…..bu…..what about the poor!  Don’t they DESERVE some of that money the rich stole!  We must spread the wealth, and distribution via credit to people who haven’t paid a dime in the first places seems like a wonderful place to start!

  • I loved their answer when queried about the fraud – something to the effect that the fraudsters know there’s not enough IRS personal to track them down and catch them blah blah blah blah.
    I screwed up on my taxes one year, and they didn’t get all they could get, let me tell you, they tracked me down post haste, fined me, threatened me, and quickly got their money.
    As a programmer any of the checks you suggested written in any freakin language is probably all of 3 minutes worth of code including any compiles you might have to do if you’re using one of the olden day systems.   Maybe they figured it just cost too much in execution cycles and disk space to store and do lookups on things like addresses or accounts though, I mean, after all, you know, this is 1960 and cpu cycles and disk storage are just incredibly costly….barf….barf…..
    I’d be interested to know exactly how much of their system the IRS has ‘off shored’ too.    🙂

  • I don’t think that you even need a bank account.
    You can have the fraudulent refund put onto a disposable, preloaded debit card.

  • Just think how all this crap could be avoided if we just went with a sales tax and had only one single social welfare payment instead of an alphabet soup of agencies.
    But no, I suppose that would be too efficient.

  • This is part of the tyranny that is our government.
    It always seems that in cases where government employees can claim stupidity, there is never any consequences for this stupidity.

    • “there is never any consequences for this stupidity.”
      Or in the case of the justice department, criminal negligence.

  • Note that in a proper free market healthcare system, most fraud would not be possible. The fraud is due to the fact that it is a third party payer paying for the service, and the third party payer then places requirments that drives the creation of HMOs and other methods to “manage” care.

    Third party payment destroys the price competition feedback loop while increasing overhead in the system. Both result in increased costs which spiral out of control. When the system is sufficiently unaffordable then the rationing will begin, and the quality of care will go into the shitter.