Tax Scam: IRS Pays Out $3.3 Million To One Lansing Address Last Year

By: WILX News 10
By: WILX News 10

The IRS pays out billions in fraudulent tax refunds, and Lansing is at the top of the list.

The IRS paid out more than $3 million in refunds to one address in Lansing. The IRS has not disclosed that address, but according to a new report issued by the IRS Inspector General, someone filed more than 2100 separate tax returns using that address, and received $3.3 million in fraudulent refunds.

The inspector general says identity thieves filing bogus tax returns got more than $5 billion in refunds last year. The inspector general also says the problem is so rampant., the IRS could pay out as much as $21 billion in fraudulent tax refunds over the next five years.

But even when the government realizes it has been scammed, the inspector general says there's not much that can be done to get the money back.

"The tax thieves or the identity thieves have learned that if they file tax returns early in the tax filing season, before a legitimate taxpayer has the opportunity to do so, they can preempt the legitimate taxpayer's refund," said J. Russell George, the treasury inspector general for tax administration. "Once the money is out the door, it is almost impossible to get it back."

Detroit is named as one of the top five cities for the most fraudulent returns, with the IRS saying fraudulent returns totaled $74 million last year - the fourth highest amount in the country.

The biggest reason for these fraudulent refunds is the IRS is under pressure to process returns and issue refunds quickly, and most employers and financial institutions don't turn in income documents for taxpayers to the IRS until the end of March. That means the IRS is issuing refunds long before it can confirm everything on the taxpayer's return.

An IRS spokesperson says the agency is cracking down on tax fraud, and calls the inspector's general's projection of more than $20 billion in fraudulent payouts in the coming years, significantly overstated. IRS officials argue that projection doesn't take into account the fact it has stepped up its compliance and prevention efforts.

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  • by Anonymous on Aug 7, 2012 at 12:55 PM
    I do not understand the mentality of this idea that there is nothing they can do. That is a bald face lie, with forensics, DNA, handwriting experts, etc, etc, it seems to me that there is a lot that can be done, why hasn't the justice dept, and as someone else said the FBI been brought in to deal with this? Like we can afford to throw away 3.3 million, if thats true why don't they throw it my way? I could use the money, like a lot of other people.
  • by Anonymous on Aug 6, 2012 at 10:48 AM
    I bet if they used the FBI they could find the people who did this.
  • by Anonymous on Aug 5, 2012 at 06:39 AM
    Enough of the INCOMPETENCE in the Federal Govt! I mean sadly common sense has left the building! We the people deserve better
  • by Anonymous on Aug 5, 2012 at 04:54 AM
    No wander tax paying people did not want obamacare to be administered through the IRS.
  • by Jamie Location: Charlotte on Aug 4, 2012 at 07:07 PM
    .....and they want to hire more IRS workers to put them in charge of OUR Healthcare?
  • by David Location: Charlotte on Aug 4, 2012 at 09:09 AM
    What about the attitude of the IRS we just flushed Billions of your tax dollers down the toilet and we ant going to do anything about it. Remember ITS YOUR MONEY NOT THIERS and yet the US Gov. is spending money like it grows on trees you cant tell me that with all the tec. in this nation they cant track the money they pay out can anyone say SCAM .
  • by James Location: lansing on Aug 3, 2012 at 07:19 PM
    2100 tax returns to the same address. What was the mailman thinking??!!
    • reply
      by Anonymous on Aug 5, 2012 at 06:40 AM in reply to James
      I dont think it was the Mailman's fault..It's the FED in the IRS BUILDING..who we dumb down the testing in order for them to get the employees they have working there..Job creating for idiots does nothing for the rest of the Intelligent Public
  • by Pam Location: Battle Creek on Aug 3, 2012 at 03:01 PM
    This is crazy. Nothing to flag the IRS once a tax return or even two has been sent to an address for that year. Fine job IRS. Place the blame on employers and financial institutions. What a joke!
  • by Kim Location: Charlotte on Aug 3, 2012 at 11:04 AM
    Probably shouldn't have mentioned in the story that it's "almost impossible" to get the money back. If people know they can get away with it, they will try it too.
  • by brant Location: mason on Aug 3, 2012 at 09:41 AM
    The REAL story here is how the IRS could have possibly sent 2100 checks to the same address without any kind of red flags until after the fact. This is your government at work. Pathetic.
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