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September 11, 2007
IRS May Lose Billions Through Bad IDs
By THE ASSOCIATED PRESS
Filed at 2:49 p.m. ET
WASHINGTON (AP) -- 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, an IRS watchdog said Tuesday.
The Treasury Inspector General for Tax Administration said that in 2004 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.
The inspector general's office, which does oversight of the tax agency,
looked at a sampling of these mismatched IDs and calculated that some 6,000
of these individuals had not filed 2004 tax returns despite having income
statements indicating they earned more than $100,000. That translates into
some $630 million in income, it said.
Much of the income involved compensation for nonemployees such as
independent contractors reported on unusable miscellaneous income
statements.
The office said that it looked at 620 income and wage statements with
mismatched names and ID numbers reporting more than $60,000 in earnings.
Using IRS automated data systems, it was able to manually match half of
those to taxpayer accounts in IRS records.
It urged that Congress pass legislation, backed by the administration, that
would require employers to verify the accuracy of ID numbers for the
employees they hire. The office also recommended that the IRS do more to
investigate high-dollar miscellaneous income and wage statements with
mismatched names and IDs.
The IRS, in response, said it supported the legislation but concluded that
the cost of manually tracking down mismatched names and IDs might exceed
that of the benefits.
''The IRS's opposition to this recommendation is confounding,'' said
Inspector General J. Russell George, adding that their audit showed that
increased examination of statements would more than pay for itself in
increased revenue.
IRS May Lose Billions Through Bad IDs
By THE ASSOCIATED PRESS
Filed at 2:49 p.m. ET
WASHINGTON (AP) -- 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, an IRS watchdog said Tuesday.
The Treasury Inspector General for Tax Administration said that in 2004 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.
The inspector general's office, which does oversight of the tax agency,
looked at a sampling of these mismatched IDs and calculated that some 6,000
of these individuals had not filed 2004 tax returns despite having income
statements indicating they earned more than $100,000. That translates into
some $630 million in income, it said.
Much of the income involved compensation for nonemployees such as
independent contractors reported on unusable miscellaneous income
statements.
The office said that it looked at 620 income and wage statements with
mismatched names and ID numbers reporting more than $60,000 in earnings.
Using IRS automated data systems, it was able to manually match half of
those to taxpayer accounts in IRS records.
It urged that Congress pass legislation, backed by the administration, that
would require employers to verify the accuracy of ID numbers for the
employees they hire. The office also recommended that the IRS do more to
investigate high-dollar miscellaneous income and wage statements with
mismatched names and IDs.
The IRS, in response, said it supported the legislation but concluded that
the cost of manually tracking down mismatched names and IDs might exceed
that of the benefits.
''The IRS's opposition to this recommendation is confounding,'' said
Inspector General J. Russell George, adding that their audit showed that
increased examination of statements would more than pay for itself in
increased revenue.
