WTHR Continues Reporting On IRS Facilitating Identity Theft

This is a continuing investigation by Bob Segall at WTHR. It should be noted that employment-related identity theft primarily by illegal immigrants. Links to the report series can be found at the link below.

WTHR investigation, congressional pressure trigger IRS policy change.

Don’t hold you breath on how long this will last IF it is actually implemented next January:

WTHR has learned the IRS will begin to notify victims of employment-related identity theft instead of keeping it a secret. The IRS has not publicly announced the change, but it will take effect in January, according to an internal document obtained by 13 Investigates.

It is not clear whether the IRS notification program will be permanent or a temporary measure, similar to a recent pilot program to notify some victims of employment-related identity theft. The IRS abandoned that pilot program in 2015 without explanation.

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Follow-up: Senate Dems Place Protecting Illegal Immigrant Fraudulent Tax Scheme Above Veterans

Here’s a great example of priorities. Yesterday, as part of the budget vote, it was reported that an amendment was offered that would’ve alleviated the military pension cuts. To pay for saving the military pension, the IRS would be forced to start denying fraudulent tax claims filed by illegal immigrants (right now, their intentionally looking the other way). Senate Democrats wanted nothing of the sort and in a party-line vote (with the noted exception of Senator Hagan), stopped the amendment cold.

For those who’ve read this blog, the tax fraud should sound very familiar:

In 2011, the Treasury Inspector General for Tax Administration found that “individuals who are not authorized to work in the United States” and therefore did not have a valid Social Security number were still able to obtain billions in Additional Child Tax Credits by filing returns with an Individual Taxpayer Identification Number.

I’ve covered this issued for a couple of years now (thanks to Bob Segall’s outstanding perseverance and assistance from whislteblowers) and includes a likely local example as well. The latest was that this fraud issue would be dealt with legislatively but Harry Reid decided to stand in the way. Now his party is blocking to doorway too. Glad they have their priorities straight…

Example Of Illegal Immigrant Tax Fraud In Utah?

I recently posted a follow-up on Bob Segall’s series dealing with the billions/year illegal immigrant tax fraud that the IRS continues to allow despite Inspector General reports. I highly recommend the investigative series. Segall’s done a great job which will, hopefully, save us billions per year…if the IRS does anything about it.

Segall’s investigation was limited to Indiana. However, it looks like a Utah company engaged in similar behavior (DOJ claims Orem tax preparer cost government $416M). That company crossed the line where the IRS doesn’t seem to care (child tax credit fraud) to where they do (deductions for fake entities etc):

The U.S. Department of Justice asked a federal court in Salt Lake City to bar Sergio Fernando Sosa and his company, Sergio Centro Latino, from preparing tax returns for others…A complaint in U.S. District Court alleges Sosa falsely claims dependents, earned income tax credits and child tax credits for customers. He also files business returns with expenses and deductions for fake entities, underreported income and inflated expenses…

The report indicates a $416 million loss over five years. I’m not sure how much of that consists of the IRS-complicit fraudulent tax credits to illegal immigrants Segall found but it would be interesting to know.

IRS Continues Payment Of Billions In Fruadulent Claims To Illegal Immigrants

In June, I noted that the IRS finally appeared taking steps to stop billions of tax dollars going to fraudulent claims filed by illegal immigrants.  Apparently, I spoke too soon.  The practice is seems to be continuing with little change (IRS wastes billions in bogus claims for Earned Income Tax Credit):

The Internal Revenue Service paid up to $13.6 billion in bogus claims for the Earned Income Tax Credit last year and as much as $132.6 billion over the past decade, according to an internal audit that already has some members of Congress questioning how the agency will be able to administer Obamacare.

IRS problems with the tax credit aren’t new. In fact, the Treasury inspector general for tax administration said it warned officials about the problems in 2011 — but two years later, the agency still hasn’t solved the situation and remains in violation of one of President Obama’s executive orders.

As noted in my June post, please see the outstanding series of investigative reports filed (all 12 reports available at linked page) by Bob Segall at WTHR in Indiana.  In the latest report, denials are up but the majority of the problem remains thanks to IRS incompetence (IRS center that reviews info from illegal workers still plagued by “chaos”):

A year after WTHR aired its original investigation, senior investigative reporter Bob Segall returned to Austin to again meet with Antelis and other IRS tax examiners who work on the front lines at the ITIN Processing Center.  Most of the workers are not impressed with the changes implemented by the IRS.

“It’s still a big scam going on,” Antelis said from his living room. “It’s still very easy to rip us off.”

Unsurprisingly, things don’t appear any better on the congressional level with Harry Reid blocking amendments to deal with the situation:

To make Congress’ intent clear – that only legal U.S. residents are entitled to ACTC credits — Grassley co-sponsored a clarifying amendment with Sen. Mike Enzi, R-Wy.

“Unfortunately, the majority leader (Harry Reid, D-Nev.) cut off debate, so we weren’t given the chance to offer our amendment,” said Grassley, the top Republican on the Senate Judiciary Committee.

I guess the IRS can get a crack team together to intimidate Tea Party folks and conservatives but putting an end to billions in actual fraud is a bridge to far.  Guess everyone has their priorities…

Above linked WTHR video report:

Billions Saved Stopping IRS Tax Fraud Malfeasance May Be Overturned

I should be ashamed. Last year I started tracking an investigation Bob Segall with WTHR had begun on illegal immigrants fraudulently collecting credits and refunds using fraudulent ITINS and, thereby, submitting falsified IRS forms. I dropped the ball and didn’t follow the investigation. At least not until

Since the last time I posted, Segall continued to press the story and highlight the Inspector General’s and IRS whistleblower efforts to stop the IRS practice of allowing the fraud. Coincidentally, Mr. George is the IG who reported on the IRS specifically targeting conservative groups. That scandal is still unfolding.

Really, the sanctioned procedure of allowing $4 Billion per year in fraudulent claims should have been a scandal all on its own. Despite no congressional or national media investigations on why this was allowed and why IRS tax processors were directed to allow it, Mr. Segall has won a sizeable victory. Click here for the full listing of his reports including video.

According to Segall’s December report the IRS was enacting new rules and procedures improving document verification in order to stop the fraud. The rules were supposed to be in effect this year and applicable to 2012 income tax filing. The only lingering question that I wish Segall have followed up on is if the IRS did actually enforce the new rules or just paid lip service to the problem? Have we seen the projected billions in savings from interdicting the fraud? Are perpetrators being pursued and prosecuted?

Hopefully, those questions will be answered. Nonetheless, Segall and WTHR deserve great credit for potentially saving taxpayers billions…billions. I certainly hope he gets a lot more recognition than just this post!

The irony of course, is that the “Gang of 8” undocumented worker amnesty bill will likely legalize the tax credits and we’ll see the billions flowing out of taxpayers pockets again: Tax Credit Bonanza For Illegal Immigrants

Exit question: Assuming we did save the money, what’s the over/under that congress blew it on pork?

Followup: The ITIN, Illegal Immigration, Fraud, And Billions In Tax Payouts

A few months ago, I caught a local Indiana news station’s (WTHR) investigative report about billions ($4.2 billion per year) in tax money being paid-out (particularly to illegal immigrants) by fraudulent means. ITINs are used by illegal aliens who also include dependents for refunds/credits even if the dependents (real or not) are not living in the US. The IRS then intentionally allows the forms to be processed, specifically instructing agents to ignore obvious fraud (as noted by whistle-blowers interviewed by WTHR).

The station has continued its investigation and finally made national headlines:

Report finds widespread fraud in taxpayer ID program

Here is the WTHR report that summarizes their findings and prompted the above headlines:

They also released another followup report yesterday. WTHR has also put up a page where they post current (and future) reports related to this matter:

Tax loophole investigation

WTHR and investigative reporter Bob Segall should be congratulated for continuing to investigate the issue and getting it as far as it has thus far. Mr. Howard Antelis, the only non-anonymous whistle-blower, also deserves credit given the retribution he may face. The IRS now says it will address this but we shall see, especially considering the apparent retaliation against Mr. Antelis.

Follow Up: The IRS And Billions In Tax Refunds To Illegal Immigrants

Several weeks ago, I posted Revealed: Tax Loophole Providing Billions To Illegal Immigrants which contained the initial Bob Segall report as well as his first follow up report. Both noted the billions in tax money flowing to illegal immigrants through a loophole and associated identity theft and document fraud. About a week ago, WTHR’s Segall presented yet another follow-up report from the perspective of IRS employees (IRS workers OK “phony” documents from illegal immigrants). They note the current IRS policy on the matter…it isn’t good:

The IRS continues to ignore the Treasury’s inspector general. Your only recourse is to contact your representative and ask them to support Rep. Burton’s HR1956. As the IRS worker states: “…this needs to be stopped.”

On local note related to child identity theft and illegal immigrants, here is the latest on Jennifer Andrusko in an NPR interview entitled: Identity Theft: ‘Kids Don’t Know They’re Victims’. You’ll recall Andrusko was inexplicably included by Utah Attorney General Mark Shurtleff to announce a credit freeze measure that gives parents a false sense of security.