IRS supervisors ignored employees who tried to warn agency higher-ups of fraud in a program designed to collect taxes from immigrants, resulting in the agency paying out potentially bogus refunds.
The Treasury inspector general for tax administration said the IRS even eliminated some methods employees had used to figure out questionable refund requests, and that the agency doesn’t have the ability to verify applicants’ identity or foreign status.
Investigators “found an environment which discourages employees from detecting fraudulent applications,” said J. Russell George, the inspector general.
The IRS pays out $6.8 billion in refunds to taxpayers who file using Individual Taxpayer Identification Numbers (ITINs), who are generally immigrants, here both legally and illegally. The amount of fraud was not stated.