When taxpayers file an amended income tax return, it’s up to the Internal Revenue Service to review that return before it can be accepted. If the amended return includes a refund or a claim of less tax due, that review takes on a bigger role in order to head off possible fraud.
Unfortunately, the Treasury Inspector General for Tax Administration (TIGTA) says more than a few amended returns are slipping through cracks in the IRS review process.
TIGTA’s audit looked at a sample of 84 amended tax returns from fiscal year 2013 that had cleared the normal IRS review process. All the sampled returns included either a refund or a reduction of taxes owed. Of those 84, the audit found 31 returns that claims that were unsubstantiated or had “large, unusual or questionable items on the tax return” that weren’t considered and investigated adequately.
The report from auditors says a combination of factors contributed to the problem – and adds that the issue can be fixed with a change in tools and procedures.
Their full report – as well as their recommendations – were forwarded to IRS management.