IRS MAY LOSE BILLIONS THROUGH BAD IDS
September 12, 2007
The Internal Revenue Service may be losing hundreds of millions of dollars because it won't spend the time and money to match millions of income statements with incorrect or missing identification numbers to existing tax accounts, says the office of the Treasury Inspector General for Tax Administration.
According to the inspector general's office:
- The IRS received about 3.8 million miscellaneous income statements reporting some $150 billion in earnings that could not be computer-matched to a filed tax return because of missing or erroneous ID numbers.
- A sampling of these mismatched IDs found that some 6,000 of these individuals had not filed 2004 tax returns despite having income statements indicating they earned more than $100,000, translating into some $630 million in income.
- Much of the income involved compensation for nonemployees such as independent contractors reported on unusable miscellaneous income statements.
The office urged that Congress pass legislation, backed by the administration, which would require employers to verify the accuracy of ID numbers for the employees they hire. They also recommended that the IRS do more to investigate high-dollar miscellaneous income and wage statements with mismatched names and IDs.
Source: Jim Abrams, "IRS May Lose Billions Through Bad IDs," Associated Press, September 11, 2007.
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