So how are those reforms going over at the IRS these days? When it comes to accountability and transparency it seems that there’s quite a bit of work left to do. During a hearing yesterday in front of the House Committee on Government Oversight and Reform, IRS officials were peppered with questions as to why they had rejected a series of reforms “suggested” by the Government Accountability Office designed to reduce incidents of fraud in federal filings. Their answer? Come on guys, we’re not talking about all that much fraud. (Daily Caller News Foundation)

Internal Revenue Service (IRS) officials shot down a congressional watchdog’s plea to improve the federal tax agency’s monitoring system to prevent paying fraudsters tax returns, according to a new Government Accountability Office (GAO) report.

GAO officials urged the IRS to beef up oversight of tax returns after IRS managers told GAO auditors some IRS employees release tax returns when the filer’s account is under review or that person filed more than one tax return, often because IRS representatives don’t understand the codes on a taxpayer’s account. But IRS officials defied GAO’s recommendation.

“IRS disagreed with our recommendation to improve data for monitoring refund releases, stating that the problem is not widespread and current processes are sufficient,” GAO said. “We maintain that the data IRS uses are not sufficient to make such a determination.”

It’s not as if were talking about a massive overhaul here. The steps being suggested would primarily consist of new policies requiring IRS agents to simply let people know if their Social Security numbers or those of their dependents were showing up in fraudulently created tax returns. On what planet is this a bad idea?

Stating that the number of incidents was “too low” to worry about, the IRS also rejected the idea of holding onto tax refunds for a while if there were obvious anomalies evident in the account. One example would be cases where multiple returns were filed for the same taxpayer. This could be an innocent enough situation if someone was amending an already filed return, but if two distinct returns show up (particularly if they are coming from different addresses) it’s a fair bet that someone is trying to game the system.

So how much of this fraud is actually going on? Given the attitude demonstrated by the IRS you might imagine that it’s a relative pittance. But this 2015 report from CNBC tells a quite different story. Even then, they were estimating that fraudulent tax returns were costing us somewhere in the range of $ 21 billion.

Tax-refund fraud is expected to soar again this tax season, and hit a whopping $ 21 billion by 2016, from just $ 6.5 billion two years ago, according to the Internal Revenue Service.

And the problem—which the agency admits is growing quickly—is compounded by an outdated fraud-detection system that has trouble identifying many attempts to trick it.

“The flaws in [the IRS’] system are so basic,” said Akli Adjaoute, founder and CEO of artificial intelligence firm Brighterion.

“The whole system is a disaster,” Adjaoute said.

Both elements of the suggested reforms put forward by the GAO seem to be common sense. The transaction between the government and the citizen when a tax return is filed essentially has two elements to it. The taxpayer is responsible for properly filing a return and the IRS is supposed to process it in a secure and efficient fashion. If there is information available which indicates that someone may be committing identity theft because two returns have shown up with the same Social Security number, it’s clearly the obligation of the government to let the taxpayer know so appropriate measures can be taken. At the same time, we are not so rich as a country right now that we can simply keep sending out checks to thieves.

Is there just some sort of culture of corruption over the IRS? Perhaps we need a bit more housecleaning in terms of sweeping out the old administration before we’re going to see any real progress on this front.

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