Report: IRS Freezes Refunds Without Notice

[Judi Lynn]

Report: IRS Freezes Refunds Without Notice
By MARY DALRYMPLE, AP Tax Writer

Tuesday, January 10, 2006

(01-10) 11:10 PST WASHINGTON, (AP) --


The Internal Revenue Service freezes tens of thousands of tax refunds it deems questionable without telling people that they're suspected of fraud, the nation's taxpayer advocate said Tuesday.

Taxpayer Advocate Nina Olson detailed the program, called the Questionable Refund Program, in her annual list of the worst problems facing taxpayers. Her office, which helps sort out disputes with the IRS, has seen a mounting number of people seeking help to claim frozen refunds.

"It is a central tenet of American law that the government must notify an accused person of the offense it suspects he committed and must give the accused person an opportunity to present exculpatory evidence to show his innocence," Olson said in her report.

In response, the IRS said the program temporarily delays a small number of refunds and has stopped "literally billions of dollars of false refunds to criminals of the legitimate tax dollars paid by honest taxpayers."
(snip/...)

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/01/10/national/w111021S97.DTL

[Eugene]

1. Most of these cases involved low income people

and most of the refunds were eventually found to be legitimate.
It wouldn't hurt the government to send a letter to these taxpayers
telling them that their refund is being challenged instead
of forcing them to chase IRS.

[calico1]

4. And they are probably counting on a lot of these

low income people to get tired of chasing the IRS and give up. That means they can keep the money. Just another way to fund the war.

[imported_dem]

8. link to the facts

to back up your statement pleae.

[athena]

10. Here you go, from the NYT:

http://www.nytimes.com/2006/01/10/business/10cnd-tax.html?hp&ex=1136955600&en=534a1252599c223f&ei=5094&partner=homepage

Tax refunds sought by hundreds of thousands of poor Americans have been frozen and their returns labeled fraudulent, blocking refunds for years to come, the Internal Revenue Service's taxpayer advocate told Congress today.

The taxpayers, whose average income was $13,000, were not told that they were suspected of fraud, the advocate said in her annual report to Congress. The advocate, Nina Olson, said her staff sampled suspected returns and found that, at most, one in five was questionable.

[stop the bleeding]

2. they have to pay for the war somehow - thank you for posting

the first part of my response was sarcasm of course.

[ClintonTyree]

3. The IRS, like "W", is above the law.

The IRS has powers far beyond what is acceptable in my opinion. The shit they can get away with is crazy and no one can do a damned thing about it.

It might not be so bad if they were treating everyone equally, but an inordinate number of lower class people are audited and harassed by the IRS than the upper class and Corporations. The upper class and Corporate America has the money to fight, stall and most often get away without paying a dime to the government. The lower class has to make up that difference and gets it up the wazoo, as always.

I'm getting really sick of the rich in this country. Maybe it's time for a good old fashioned class war, we'll see how well the rich can handle their everyday lives without us!

[pinerow]

5. What do they do with taxes witheld from so-called undocumented workers...

and what is done with their FICA and MediCare witholdings...that's got to be worth a dollar or two...:wtf:

[warrens]

6. Better than they send the refund, you spend it, then they come after you..

[Commie Pinko Dirtbag]

9. The issue here isn't the lack of refund, but the lack of notification -nt

[bluestateguy]

7. I'm sure the Heritage Foundation will do something about this

Right?

Oh maybe conservatives only complain about IRS tyranny when the victims are corporations and rich businessmen.

[Orsino]

11. Stop-loss. n/t

[OKNancy]

12. kick

[DeepModem Mom]

13. NYT: I.R.S. Move Said to Hurt the Poor

I.R.S. Move Said to Hurt the Poor
By DAVID CAY JOHNSTON
Published: January 11, 2006


Tax refunds sought by 1.6 million poor Americans over the last five years were frozen and their returns labeled fraudulent, although the vast majority appear to have done nothing wrong, the Internal Revenue Service's taxpayer advocate told Congress yesterday.

A computer program identified the refund requests as suspect and automatically flagged the taxpayers for extra scrutiny for years to come, the advocate said in her annual report to Congress. These taxpayers were not told that the I.R.S. criminal investigation division suspected fraud.

The advocate, Nina Olson, said the I.R.S. devoted vastly more resources to pursuing questionable refunds sought by the poor - which under the highest estimate is $9 billion - than to the $100 billion in taxes not paid each year by people who work for cash and either fail to file tax returns or understate their income.

As for the suspected fraud in refund requests, Ms. Olson said her staff sampled the suspect returns and found that 66 percent were entitled to the amount sought or more. Another 14 percent were due a partial refund. She expressed doubt that many among the remaining 20 percent had committed fraud....

***

The I.R.S. criminal division defended its program as a successful effort to protect against refund fraud, saying it "has stopped literally billions of dollars of false refunds to criminals." It said the program was intended to be fair to all taxpayers while efficiently using limited law enforcement resources....


http://www.nytimes.com/2006/01/11/business/11tax.html

[Julius Civitatus]

14. This is Bush's America. Our new motto: "F#ck the poor!"

The article says that the IRS literally stopped checking on corporate tax fraud, and focused instead on prosecuting possible fraud from people making $13,000 a year or less.

Mind bending, truly. The Republicans are positively pro corporate crooks. Period.

[Straight Shooter]

15. $13,000. How much tax fraud can you commit with only $13,000 a year?

This is nuts.

The spokesperson said it saved "literally billions of dollars." Would that be literally 2 billion, 3 billion? What?

I bet the dollars wasted pursuing these so-called fraudulent returns is even greater than the amount of fraud involved. They always go after the little guys, because the little guys can't afford to fight. Harmless mistakes, probably, not fraud. They can't even afford an accountant because it would eat up whatever refund they make.

How long did it take the IRS to figure out Abramoff and his friends, eh?

[Mithras61]

16. Well, to be honest...

it isn't the individual ammount, it's the combined ammount. $1B/1.6M individuals is only $625 each. That's easily in the range of ammounts available for things like low-income tax credits.

I'm not defending the IRS here, only making the argument that the ammounts cited aren't ridiculous. The facts, however, do not support the contention that the poor are more likely to cheat on their income taxes than the rich...

[Straight Shooter]

17. If you're making only $13K per year, of course you'll look for credits.

There's fraud and then there's honest mistakes and then there's "the government is robbing me and I'm starving and can't afford medicine and f*ck it all," which is a defensive rationalization for fudging on a return.

I know you're not defending the IRS, and I understand that taxes are in place because it's the cost of living in society (for most of us). It just makes me see red, when I think of all the corporations with headquartered offshore accounts, ripping us all off to the tune of many "literally billions of dollars." It's disgusting.

[Mithras61]

18. I agree completely...

that the tax loophole that allows billions of dollars in lost taxes to slip through the IRS' fingers needs to be closed. The fact is that back in the 60s, something like 70% of the Federal budget was based on corporate taxes. Now it's less than 10%, IIRC.

In any case, the tax burden has been shifted off the ones who can bear the burden and onto those of us who cannot afford it with nonsense arguments like those propogated by * during the latest round of tax giveaways to the wealthy.

[DiverDave]

19. Well, I guess they will withhold/audit me

since I cant afford a lawyer.
Yeah, keep my money you rat bastards, my kids don't need the things I will buy for them with it.
FUCKERS, just plain RAT FUCKERS!!:mad::mad: