A U.S. senator is questioning the IRS this week after an On Your Side Investigation exposed a major loophole in how your tax refunds are paid out. Crooks are walking away with billions of dollars in fraudulent refunds and the IRS could do more to stop it.
Senator Mark Warner fired off a letter to the IRS commissioner this week, asking him to respond to several questions about how the IRS is investigating tax refund fraud. He specifically mentions a loophole we exposed on Monday night.
Here's the problem. Employers are required by law to send out our W-2's by the end of January, but most employers don't have to provide that exact same information to the IRS until the end of March.
So, there's this two month window where crooks can file at will with little oversight. The IRS can't double check the information in most cases until July.
Last year thieves walked away with 5.8 billion dollars from fake returns.
Senator Warner has asked the IRS if it could move up the employer deadline. He also wants to know if delaying the the start of filing season would help the agency to better identify refund fraud.