Updated: Wednesday, 23 Dec 2009, 10:28 PM EST
Published : Wednesday, 23 Dec 2009, 10:18 PM EST
BY LUKE FUNK
MYFOXNY.COM - The government watchdog group that oversees the Internal Revenue Service says the tax agency can't verify taxpayer eligibility for two-thirds of the stimulus package that was enacted this year, opening the door for massive tax fraud.
The Treasury Inspector General for Tax Administration released a 22 page audit report. It looked at the IRS's ability to ensure proper use of tax benefits and credits provided by the American Recovery and Reinvestment Act of 2009.
The huge government program claims to have created more than 640,000 jobs but those numbers have been questioned.
The Recovery Act contains 56 tax provisions with a potential cost of $326 billion in federal funds.
The report claims that the IRS will not be able to verify taxpayer eligibility for 39 of the the 56 of Recovery Act tax benefits and credits when a tax return is processed. The problem is that no specific documentation is being requested from taxpayers to claim the credits.
Limitations in its electronic filing program prevents the IRS from accepting supporting documentation.
That means that, unless a return is audited, tax cheats could get away with false deductions that the IRS might not be able to catch.
The audit did not include any recommendations to fix the problem.
http://www.myfoxny.com/dpp/news/nationa ... -act-fraud