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IRS flags 1.1 million possibly fraudulent tax returns, stops $105.3 million in illegal refunds

A Treasury Inspector General for Tax Administration (TIGTA) report on the early results of the 2023 filing season shows that the agency is still taking identity theft seriously.

This filing season, which wrapped up (save for extensions) on April 18, was the first since the pandemic began where individual tax return processing and related activities returned for the most part to normal timelines, noted TIGTA.

As of March 3, the IRS had received 54.9 million tax returns, or almost a third of the 167 million filings it expects to get this year.

Of that nearly 55 million, TIGTA says the IRS had identified nearly 1.1 million tax returns it held for additional review due to the agency's identity theft filters. Those filings were for refunds totaling approximately $6.3 billion.

Ahead of 2022: By that same early March date, the IRS had confirmed 12,617 tax returns were fraudulent and did not issue the $105.3 million in refunds illegally claimed by those fake filings.

Already this year, the IRS is ahead of 2022's early filing season pace in stopping crooks from filing fake returns to get fraudulent refunds.

Identity Theft Tax Returns Confirmed
Fraudulent in Processing Years 2022 and 2023

Processing year

Confirmed ID theft returns





Source: IRS fraudulent tax return statistics for Processing Year 2022 (as of March 3, 2022)
and Processing Year 2023 (as of March 2, 2023)

More fraud filters: This year's success is due to the 236 filters the IRS is using to identify potential identity theft tax returns and stop fraudulent refunds. In comparison, the IRS used 168 filters for the 2022 Filing Season.

While the fraud filters can slow processing of legitimate returns, they are the best tool the IRS has to keep from issuing money to criminals who are impersonating taxpayers.

The IRS' 2023 filing season effort that led to closer inspection of 1.1 million tax returns deserves credit. But this week's dual By the Numbers honorees are the 12,617 confirmed fraudulent filings that the IRS caught, keeping $105.3 million out of the hands of crooks.

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