IRS told employees to ignore potential fraud in program used by immigrants?

IRS supervisors ignored employees who tried to warn agency higher-ups of fraud in a program designed to collect taxes from immigrants, resulting in the agency paying out potentially bogus refunds, according to an official audit released Wednesday.

The Treasury’s inspector general for tax administration (TIGTA) said the IRS is too focused on getting out refunds quickly rather than getting them only to qualified taxpayers. Auditors also said the agency eliminated some methods employees had used to figure out questionable refund requests and doesn’t have the right training or tools to screen out bogus identity documents when immigrants apply for taxpayer numbers.

“TIGTA found an environment which discourages employees from detecting fraudulent applications,” said J. Russell George, the inspector general.

In the wake of the finding, one congressman called on the IRS commissioner to resign.

IRS pays out $6.8 billion in refunds to taxpayers who file using Individual Taxpayer Identification Numbers (ITINs). They generally are immigrants, here both legally and illegally. The potential amount of fraud was not stated, but the investigators detailed seven schemes that paid out $9 million in tax refunds in 2011

The agency said it has put new checks in place to try to crack down on fraud, including getting training from the Homeland Security Department on how to verify documents when an immigrant applies for an ITIN.