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Fraudulent Returns in One Area Generating $20 Billion in Fraudulent Refunds

Date: December 23, 2020

Author: Trish Wright

Fraudulent refunds in the area of the Earned Income Credit (which requires kids) and in the corresponding Additional Child Tax Credit are generating $20 Billion in improper claims in 2013--yes $20 Billion. This fraud is escalating rapidly -- from approximately $5 Billion in 2011 and just under a million in 2010. I had a single client that was unemployed for 2 years due to a serious illness. During the time he was sick, someone got a hold of his social and filed two years of fraudulent returns on his "behalf". The IRS agent accidentally let it slip, while I was trying to clear up his situation, that it was an EIC return ("He has two children correct? And his income was $X? No and no.) I know advise all clients to file every year--even senior citizens who don't need to file, those under the requirement cap, those on non-taxable disability income due to injury to file a tax return, even if they have to write in $1 in interest to make it e-file. All to protect them from someone "bad" somehow, someway grabbing their socials. As citizens, we should file a letter writing campaign to demand that these refundable credits be converted to funds that welfare agencies can more monitor and distribute directly to those in need with proof of both need and identity.

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