Bits & Bytes
THE IRS IS ON THE LOOKOUT FOR BOGUS ELECTRONIC RETURNS
During the 1991 filing year, more than 7 million taxpayers received speedy refunds by having tax preparers electronically submit their returns to the Internal Revenue Service. But using a computer to file has also helped a lot of crooks to get quickie refunds that they aren't entitled to. Here's how: Scam artists submit false reports to tax preparers, who then send them electronically to the IRS. After a preliminary check, the IRS tells the preparer that the reports appear correct. The preparer then issues the refund, or a loan for that amount, and the crook disappears.
Last year, crooks used 5,746 such bogus returns to steal several million dollars in unwarranted refunds, says IRS spokesman Donald Roberts. And this year the IRS is finding more cheaters. More than 630 electronic returns filed by February have been deemed fraudulent. That's more than five times the number discovered by the same time last year. To close the loophole, the IRS is beefing up the number of auditors checking electronic filings, and agents are working closely with the Justice Dept. to prosecute the tax cheats they nab.EDITED BY PAUL M. ENG