Fraud Detection Filters Causing Delays in Some IRS Refunds

The IRS continues to place premium importance on the prevention of identity theft and non-identify theft refund fraud, but its implementation of process improvements and fraud detection filters are creating hardships for taxpayers seeking a refund, as the filters have frequently incorrectly tagged some returns.

Acting National Taxpayer Advocate Bridget Roberts explained in her annual report to Congress that, for the 2019 tax return filing season, the IRS implemented a new fraud detection filter called Filter X. Despite best intentions, however, the filter erroneously marked 1.1 million tax returns for potential fraud, causing unnecessary delays in refunds. Other filters incorrectly flagged legitimately filed returns, registering a false positive rate of 71%.

Despite the significant amount of delayed returns, the new filters have stopped the IRS from issuing nearly $2.7 billion in fraudulent refunds. The agency will continue efforts to improve its filters and processing times for the 2020 tax return filing season, which begins January 27, 2020.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2022 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Individual Tax Filing Season to Begin January 24
Applicant Promoting and Engaged in Providing Travel Tours Denied 501(c)(3) Status
Tax, Tax Policy BY Elizabeth Beck
New Beneficial Ownership Reporting Rules
Are you still waiting for your 2020 IRS refund? What you need to know…
New Pennsylvania Electronic Payment Requirements for Personal Tax Payments Greater than $15,000 Beginning January 1, 2022.
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×