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November 8, 2010

TIGTA - 2010-72
Karen Kraushaar
karen.kraushaar@tigta.treas.gov
TIGTA-PAO@tigta.treas.gov
(202) 622-6500

Multiple Use of Taxpayer Numbers Allows $380 Million in Erroneous Tax Credits and Payments, TIGTA Finds

WASHINGTON - Individuals inappropriately received at least $380 million in personal tax exemptions and tax credits in 2007 as a result of the multiple use of Taxpayer Identification Numbers (TINs), according to a new report released publicly by the Treasury Inspector General for Tax Administration.

Any person required to file a tax return must include an identifying number, referred to as a TIN. For the majority of filers, the TIN is the individual's Social Security Number, or SSN. If no SSN is available, the Internal Revenue Service (IRS) assigns a TIN, which can only be used to claim credits on one tax return per year.

TIGTA identified 2.4 million unique TINs that were used to claim a personal exemption or a tax credit on 3.2 million tax returns in 2007.

"Our report underscores the serious challenge the Internal Revenue Service faces in preventing erroneous tax benefits associated with multiple Taxpayer Identification Number uses," said J. Russell George, the Treasury Inspector General for Tax Administration. "Left unaddressed, the amount of erroneous payments our report identified could exceed $1.9 billion over a five-year period," he added.

TIGTA made four recommendations to the IRS in its report. The IRS agreed with two, but disagreed with the others.