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TIGTA exposes $3.5B tax fraud scheme.

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TLDR:

– The Treasury Inspector General for Tax Administration uncovered a scheme to claim $3.5 billion in improper pandemic relief tax credits.
– Fraudsters obtained Employer Identification Numbers to claim Employee Retention Credit and Sick and Family Leave Credits on business tax returns.

Article:

The Treasury Inspector General for Tax Administration (TIGTA) helped the Internal Revenue Service uncover a scheme to fraudulently claim as much as $3.5 billion in improper pandemic relief tax credits. TIGTA’s Office of Investigations identified a scheme where fraudsters obtained Employer Identification Numbers to improperly claim Employee Retention Credit and Sick and Family Leave Credits on business tax returns. These returns often did not indicate whether the businesses were active or operating.

TIGTA alerted the IRS, which implemented safeguards to prevent similar schemes in the future. The IRS has been focusing on cracking down on Employee Retention Credit fraud and pandemic relief fraud in general.

TIGTA’s acting inspector general, Heather Hill, stated, “This is a great example of how TIGTA can save the federal government and taxpayers billions of dollars. We’re helping prevent improper payments before they happen – not paying and chasing them after the fact when they can be more expensive and difficult to recover.”

The office has been using funds received from the Inflation Reduction Act to identify complex fraud schemes and has been investing in innovative tools and hiring experienced employees with technical skills to protect taxpayer dollars. Trevor Nelson, TIGTA’s deputy inspector general for investigations, mentioned, “This enables us to quickly identify emerging fraud schemes with potentially significant financial consequences to the federal government.”

This uncovering of the $3.5 billion tax relief scheme highlights the importance of vigilance and collaboration between agencies to prevent fraud and protect taxpayer dollars.


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