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Tax Administration: IRS Has Implemented Initiatives to Prevent, Detect, and Resolve Identity Theft-Related Problems, but Needs to Assess Their Effectiveness

GAO-09-882 Published: Sep 08, 2009. Publicly Released: Oct 08, 2009.
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Identity thieves may use a taxpayer's name and social security number to fraudulently claim a refund or gain employment. This creates tax problems for the innocent taxpayer when the Internal Revenue Service (IRS) discovers a duplicate refund claim or unreported wage income. IRS is revising its strategy for preventing, detecting, and resolving identity theft-related tax problems. GAO was asked to (1) describe the extent of identity theft-related refund and employment fraud, (2) assess IRS's actions to prevent and resolve such problems, and (3) describe IRS's identity theft- related coordination with other agencies. GAO analyzed IRS data on identity theft cases, reviewed revisions to the Internal Revenue Manual and other agency documents, and interviewed IRS officials responsible for the new strategy


Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should ensure that performance measures suitable for assessing the effectiveness of its identity theft initiatives, and associated data collection procedures, are in place at the beginning of the 2010 filing season.
Closed – Implemented
IRS developed and implemented data collection and reporting procedures to support its implementation of performance measures prior to the beginning of the 2010 filing season. These measures will allow IRS to analyze and evaluate more completely the effectiveness of its identity theft programs as well as identify opportunities for future program development and improvement.

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Confidential informationCrime preventionData collectionFraudIdentity theftInformation disclosureInformation leakingInformation managementInformation securityPerformance measuresRisk assessmentRisk managementSocial security numberStrategic planningTax administrationTax administration systemsTax information confidentialityTax refundsTaxpayersVoluntary complianceWhite collar crimePolicies and procedures