Report: IRS Gave Millions In Fraudulent Refunds

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Report: IRS Gave Millions In Fraudulent Refunds

POSTED: 1:11 pm PDT September 2, 2006

WASHINGTON -- The IRS gave away $318 million in improper refunds this year because a computer program that screens tax returns for fraud wasn't working.

The estimate by the Treasury Inspector General for Tax Administration is slightly higher than the IRS's own calculation. The tax agency thought it had paid out $2 to $300 million in improper refunds.

The inspector general plans a future study to look more closely at the amount of money the government lost, along with IRS procedures for detecting fraudulent refunds.

The IRS is now trying to get an updated version of the computer program up and running in time for next year's deadline. The refund fraud program had stopped 412 million in fraudulent returns in 2005.

Just one more reason the IRS needs to be abolished.