Software

IRS programming glitch costs millions in errant tax refunds

A programming error has cost the Internal Revenue Service millions in faultily disbursed tax refunds, a Nov. 12 Treasury Inspector General for Tax Administration (TIGTA) report made public Dec. 21, revealed.

The refund claims, identified as sketchy by the Return Integrity and Compliance Services' Integrity and Verification Operations  teams, should have been held for further review, but the computer glitch TIGTA discovered did precisely the opposite.

If a return that had been slapped with a two-week resequencing tag was also selected for examination within the IRS' systems, the error would kick in, removing the hold altogether and allowing the suspect refund to be disbursed.

The damage for the 2013 tax year alone: more than 13,000 erroneous tax refunds totaling more than $27 million.

The IRS apparently failed to catch the glitch because of poor oversight of tax return review timelines.

TIGTA also found another 3,910 2013 returns that the IRS had marked for review, but which examiners had left unverified. Those returns cost some $19 million.

TIGTA recommended that the IRS fix the glitch within the IVO system, institute periodic testing to reconcile verification records with other IRS systems and hold reviewers to account when it comes to verifying claims in a timely fashion.

"While the IRS has made important strides in its programs that prevent the issuance of fraudulent refunds, our auditors found that it is not always ensuring that tax examiners timely complete their verification work before releasing refunds," IRS watchdog J. Russell George said.

The IRS agreed with the TIGTA recommendations.

About the Author

Zach Noble is a former FCW staff writer.

Featured

  • Defense
    Ryan D. McCarthy being sworn in as Army Secretary Oct. 10, 2019. (Photo credit: Sgt. Dana Clarke/U.S. Army)

    Army wants to spend nearly $1B on cloud, data by 2025

    Army Secretary Ryan McCarthy said lack of funding or a potential delay in the JEDI cloud bid "strikes to the heart of our concern."

  • Congress
    Rep. Jim Langevin (D-R.I.) at the Hack the Capitol conference Sept. 20, 2018

    Jim Langevin's view from the Hill

    As chairman of of the Intelligence and Emerging Threats and Capabilities subcommittee of the House Armed Services Committe and a member of the House Homeland Security Committee, Rhode Island Democrat Jim Langevin is one of the most influential voices on cybersecurity in Congress.

Stay Connected

FCW INSIDER

Sign up for our newsletter.

I agree to this site's Privacy Policy.