The IRS Responds to the "Frozen Refund" Controversy

IRS Commissioner Mark Everson responded today to the mounting criticism of the Questionable Refund Program of the Criminal Investigation Division by ordering a review of the program. Everson said that in the near future improved notification and better processing--to reduce the number of frozen refunds--could be expected. Although acknowledging flaws, the IRS restated that the program was reducing tax losses by half a billion annually and that considerably less than 1% of all individual tax returns were affected, with less than a quarter of 1% of all returns having refunds delayed by over a week.

I certainly am no fan of tax fraud or evasion and the program has had some impact on reducing tax losses. Nevertheless, the reforms announced today MUST effectively solve the notification problem and significantly reduce the length of wait for legitimate refunds which are frozen if the Questionable Refund Program is to have any political viability or credibility.