TIGTA: Frivolous Tax Arguments Cost $27.2 Million to IRS in 2014
has faulted the IRS
Frivolous tax arguments
262,121 potentially
frivolous tax returns, despite
these tax returns having the characteristics filters are intended to identify. Of these returns, TIGTA said the IRS paid out $27.2 million in credits and refunds to 1,938 of these taxpayers.
It could be due to lack of staff training. TIGTA noted that while the IRS does provide staff
on frivolous tax arguments, those working in the units most likley to encounter frivolous tax arguments are not required to take this training.
According to the IRS, these two online training courses had
been taken only 726 times
between November 2011 and September 2015. By comparison, the
IRS plans to bring on more than 19,000 returning or new seasonal employees for the 2016 Filing
Season
whose responsibilities will include opening mail, sorting tax returns, inputting paper tax
returns into the IRS’s computer system
s, and working tax returns with IRS identified errors. All
of these tasks provide an opportunity for employees to identify frivolous tax returns
and/or
correspondence," said TIGTA.
The IRS, in response to the TIGTA report, noted that it has prevented the payment of $3.6 billion worth of fraudulent refund claims and has assessed over $233 million worth of fines for frivolous arguments. While it agreed with TIGTA that there needs to be additional filters to identify frivolous claims, it noted that filing patterns consistent with frivolous claims are not always consistent with actual frivolous claims. Further, just because a filter might indicate a return has a low risk of being frivolous does not mean that the return is completely guaranteed it won't be frivolous.