IRS Fail: Thousands Of Living Taxpayers Deemed Dead

IRS Says FBI Has Been Called In

( – The IRS is in the hot seat after an audit discovered the agency’s employees are making significant mistakes. That includes refusing to issue checks to living people because the agency has locked their accounts for a bizarre reason.

On August 7, the Treasury Inspector General for Tax Administration (TIGTA) issued a report about the tax agency erroneously declaring taxpayers dead and locking their accounts. As of January 1, 2022, the audit found there were 77,868 taxpayers who may have had this happen to their accounts because they were incorrectly labeled as deceased.

A subsequent audit for the period between January 2, 2022, and October 29, 2022, found the IRS continued to lock accounts erroneously. In fact, TIGTA found 14,193 possible incidences. In addition, the agency issued notices to more than 9,000 of the 77,868 taxpayers, informing them that their tax returns could not be processed because of this.

The TIGTA issued several recommendations to fix the systems. First, the inspector general recommended the IRS review the 77,868 accounts. Agents agreed and found that 20,222 were erroneously locked. Another 57,646 accounts were locked appropriately. The second recommendation was that they review the remaining 63 accounts to make a final determination. That is currently underway.

The third recommendation related to the subsequent audit that took place through October and suggested the IRS review those 14,000+ locked accounts. The tax agency agreed. The inspector general issued a fourth recommendation that the IRS should evaluate why the accounts were locked and provide further clarification. The agency agreed to do that as well.

The inspector general asked the IRS to ensure the new programming that was implemented is working correctly, as its fifth recommendation. The sixth and seventh recommendations were to improve the process for identifying erroneously locked accounts and send out updated notices to taxpayers, letting them know they can work with the IRS. The agency agreed with the sixth recommendation but disagreed with the seventh. It claimed the first notice gave taxpayers information about how to resolve the issue, but the TIGTA responded, saying it wasn’t sufficient.

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