Thursday 14th of December 2017 8:18:37 AM

  • Refund Split, Not a Hit!

    Tuesday 20th of November 2012 10:50:51 AM

    According to the recent report released by the Treasury Inspector General for Tax Administration (TIGTA) the risk for fraud has been increased because the IRS provides an option to allow  tax payers to split their refunds into multiple accounts.

    In 2011 more than 842,000 tax payers opted to take advantage of the “split refund” selection.  The IRS has made this option available to taxpayers since 2007.   This option allows tax payers to split the tax refund in two or three different bank accounts.

    Auditors employed by Treasury Inspector General for Tax Administration (TIGTA) have discovered that the methods that that the IRS are using to guarantee the precision of direct deposit information are not adequate.  This increases the potential for fraud.  Just by offering the option to split the risk of fraud is increased significantly. TIGTA found that approximately $1.6 billion of refunds were split between more than 65,300 bank accounts.  What’s more interesting is that 4,400 of those bank accounts were those of tax preparers’ personal tax returns.  Are these tax preparers redirecting these funds to actually pay for their services or other reasons?

    After careful review of this issue TIGTA has suggested that the IRS should better identify whether it is the tax payer or prepare rerouting these funds into their own bank accounts.  The IRS has agreed and has planned that suitable remedial action is to be taken in the future.

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