IRS taking action after 13 Investigates report on tax fraud - 13 WTHR Indianapolis

IRS taking action after 13 Investigates report on tax fraud

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Howard Antellis, IRS tax examiner Howard Antellis, IRS tax examiner
INDIANAPOLIS -

13 Investigates has learned the IRS is now taking action following an Eyewitness News investigation. The changes will reduce fraud and save taxpayers billions of dollars.

Earlier this year, 13 Investigates exposed massive fraud inside the IRS. We showed how tax credits meant for kids who live in the United States are being issued for children who live thousands of miles away in foreign countries.

"It's a billion-dollar fraud," said Howard Antellis, IRS tax examiner.

IRS workers told us they were told to ignore the fraud, especially involving ITINs, individual taxpayer identification numbers.

The IRS issues those numbers to people who are not US citizens so they can file taxes and get tax refunds.

But whistleblowers told us the ITIN system is being abused by millions of people who use fake documents to get ITIN numbers and big tax refunds they're not entitled to.

"It's very simple to get one of these ITINs for a person who doesn't exist," said Antellis, who believes millions of fraudulent ITINs have been issued at a cost of around $4 billion annually.

Our investigation sparked outrage from lawmakers and a report from US Treasury Inspector General calling on the IRS to make substantial changes to its ITIN program.

Now, from IRS headquarters in Washington, there are new rules and procedures announced to reduce all that fraud.

Anyone who wants an ITIN will have to prove their identity using original or officially certified documents.

Notarized copies of birth certificates, medical records and drivers licenses will no longer be accepted because they're easily forged.

To get an ITIN for children, their documents will have to be sent directly to the IRS for approval.

But for adults, they'll be able to go to special Taxpayer Assistance Centers. The IRS is now training workers at those centers to verify and approve documents from ITIN applicants.

Perhaps the biggest change: for the first time ITIN numbers will have an expiration date. They'll only be good for five years. It's an extra safeguard to prevent abuse.

The changes take effect January 1st, just in time for the upcoming tax season. The new permanent rules are designed to reduce the widespread fraud exposed in our investigation. And the savings are expected to be in the billions.

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