As of April 30, 2011 The IRS had identified 775,723 tax returns with $4.6 billion claimed in fraudulent refunds and prevented the issuance of $4.4 billion of those fraudulent tax refunds. That is a prevention rate of nearly 96%. This represents a 171% increase in the number of fraudulent tax returns identified during the same period in 2010.
The commissioner of the IRS's Wage and Investment Division, Richard Byrd, said this was accomplished by improved identification and screening of prisoner tax returns. This is a 256% increase compared to last year.
The Treasury Inspector General for Tax Administration also found other problems including 26,649 taxpayers who had their Home Buyer Credit inaccurately processed, $5.8 million in repayment amounts was not assessed and $675,063 in repayment amounts was erroneously assessed.
These findings were all part of the TIGTA's review of the IRS performance during 2011 tax season.
You can read the full report from Accounting Today here