IRS Needs Better Oversight of Repayment by Tax Cheats

By AccountingWEB Staff 

According to a new Treasury Inspector General for Tax Administration (TIGTA) report - "Procedures Are Needed to Improve the Accounting and Monitoring of Restitution Payments to Prevent Erroneous Refunds" - the IRS should beef up its internal controls to make sure that those convicted of tax crimes pay up.
 
"If the IRS does not collect the restitution that it is owed by criminals who have been convicted of tax-related crimes, justice has not been served," said J. Russell George, Treasury Inspector General for Tax Administration. "All efforts must be made to collect on the funds due to the American people."
 
In fact, the report found that the IRS in some cases wrongly gave refunds totaling about $543,000. IRS officials were unable to properly account for restitution payments or to ensure defendants were following conditions of their probation. TIGTA's analysis of data used to monitor defendants identified inaccurate tax account data totaling approximately $330,000 for twenty-five defendants. 
 
Those who are convicted of tax-related crimes can be required to go to prison, serve probation, pay fines, make restitution, or carry out any combination thereof. The report noted, "However, the perception has grown that many defendants, despite being convicted of violating the tax laws, are escaping all responsibility for the payment of the taxes associated with the offenses they committed."
 
TIGTA recommended internal control improvements, establishment of a single database for monitoring defendants, revising guidelines for earlier notification to the IRS Criminal Investigation Division of the status of whether convicted individuals' are meeting the conditions of probation and restitution, and obtaining the IRS Office of Chief Counsel's opinion on the use of refund offsets.
 
The IRS agreed with the recommendations, saying improvements have already been made.
 
 
Related articles:
 

You may like these other stories...

Did you know that the tax code allows you to claim tax deductions for household damage caused by thefts, vandalism, fires, floods, hurricanes, and others kinds of casualties? But the law imposes several restrictions.Relief...
Inversions: Loophole Is the ProblemJacob J. Lew, the U.S. Treasury Secretary, published an opinion piece in the Wall Street Journal that "the system has become full of inefficiencies and special-interest loopholes. That...
School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.