IRS Testing New Program to Fight Tax Fraud

The Internal Revenue Service is testing a new Return Review Program to help identify instances of tax return fraud, but the security of the system needs improvement, according to a new government report. The report, publicly released Tuesday by the Treasury Inspector General for Tax Administration, said the IRS chartered the initiation of the Return Review Program, or RRP, in 2009 to replace the Electronic Fraud Detection System, also known as the EFDS. The IRS paused the development of the RRP in January of last year to allow more time to evaluate the performance and design of the parallel-processing database in the system and to revisit the IRS’s strategic business fraud detection goals. TIGTA found that during an IRS pilot test, the RRP models flagged potential identity theft fraud not detected by the EFDS models. During a 32-day test, the RRP Identity Theft Model identified 51,946 returns as potential identity theft cases. The IRS confirmed that 41,311 of those returns involved identity theft. Read More