The Treasury Inspector General for Tax Administration helped the Internal Revenue Service uncover a scheme to claim as much as $3.5 billion in improper pandemic relief tax credits.
Investigators from TIGTA's Office of Investigations spotted a scheme where fraudsters obtained Employer Identification Numbers and then used them to improperly claim Employee Retention Credit and Sick and Family Leave Credits on business tax returns. The returns often gave no indication whether the business was active or operating.
TIGTA alerted the IRS, which put safeguards in place to stop similar future schemes. The tax agency has been cracking down on
"This is a great example of how TIGTA can save the federal government and taxpayers billions of dollars," said Heather Hill, TIGTA's acting inspector general, in a statement. "We're helping prevent improper payments before they happen ─ not paying and chasing them after the fact when they can be more expensive and difficult to recover. I'm proud of the work our Office Investigations did to identify this scheme and alert the IRS so they could implement appropriate fraud controls."
TIGTA noted that has been using some of the money it received from the Inflation Reduction Act to identify complex fraud schemes.
"We're strategically using our budget to invest in innovative tools and hire experienced employees with sought-after technical skills who are dedicated to protecting taxpayer dollars," said Trevor Nelson, TIGTA's deputy inspector general for investigations, in a statement. "This enables us to quickly identify emerging fraud schemes with potentially significant financial consequences to the federal government."
