Paper On Detecting And Responding To Findings Of Fraud And W

Paper On Detecting And Responding To Findings Of Fraud Waste And Abu

Paper on Detecting and Responding to Findings of Fraud, Waste, and Abuse: You will prepare a two-page paper on a recent (January 2014- or more recent) instance of federal fraud, waste, or abuse. The paper should be based on research of a federal department or agency and how a current instance of fraud, waste, or abuse was detected and addressed by that department or agency. I have chosen the IRS and have some links you can use. Some research is required on your part. Most be 2-3 pages in length, 12 point font.

Stolen Identity Refund Fraud (SIRF), IRS Victims

This paper, including citations and bibliographic references, is to be done in APA style at least 2-3 pages in length, including a cover page and a page for sources and page numbers with section heading.

Project Requirement Lists recent (since January 2014) instance of federal fraud, waste, or abuse in a federal agency. Summarize the issue, what led to the issue occurring. List the reason that the issue is an instance of fraud, waste, and abuse, and specify whether it is fraud, waste, or abuse. The paper should identify the steps the agency took (e.g., the Office of Inspector General) to identify the fraud. Delineate steps you recommend the agency should take to avoid the issue in the future (e.g., improve specific internal controls, change hiring conditions). Proper research should include at least two sources, and sources listed in a references section.

Proper format: 2-3 pages of content + 1 cover page + 1 page for sources; section headings, double spaced, page numbers.

Paper For Above instruction

Introduction

Fraud, waste, and abuse pose significant threats to the integrity and efficiency of federal agencies. In recent years, the Internal Revenue Service (IRS) has been notably impacted by instances of stolen identity refund fraud (SIRF), which not only undermine public trust but also result in substantial financial losses. This paper examines a recent case of SIRF within the IRS, detailing how the fraud was detected, the agency's response, and recommendations to prevent similar incidents in the future.

Overview of the Fraud Incident

Since January 2014, the IRS has experienced a surge in refund fraud cases, with SIRF standing out as a particularly pervasive issue. SIRF involves criminal actors stealing personal identifiable information (PII) from taxpayers to file fraudulent tax returns, claiming refunds unlawfully. A recent notable incident occurred in 2019, when the IRS detected a significant increase in fake refund claims linked to compromised taxpayer data. According to the Treasury Inspector General for Tax Administration (TIGTA) report (2020), the fraudulent activity resulted in billions of dollars in erroneous refunds.

The root causes of this problem are multifaceted. Criminal organizations exploit data breaches from third-party vendors, steal PII through phishing schemes, and sometimes manipulate internal procedures. Once the data is compromised, the fraudsters file false returns during tax season, often before legitimate taxpayers file their returns.

Detection of the Fraud

The IRS utilizes multiple methods to identify such fraud. The TIGTA report highlights that the agency relies heavily on automated systems integrated with traditional audit and investigative units. During the 2019 incident, the IRS employed data analytics software to detect anomalies such as multiple claims from the same address or bank account, which suggested fraudulent activity. Additionally, the IRS cross-referenced suspicious returns with previous filing patterns and identified inconsistencies.

The IRS’s Office of Inspector General (OIG) plays a critical role in identifying such issues. Through audits and investigations, the OIG uncovers vulnerabilities in the system. In 2019, they identified weaknesses in the IRS’s identity verification posture, which allowed criminals to exploit the system.

Responses by the IRS

In response to the SIRF surge, the IRS adopted several measures. These included increased scrutiny of refund claims, enhanced identity verification processes, and collaboration with the Department of Justice (DOJ) for investigations. The IRS also issued alerts to taxpayers warning them against impersonation attempts and implemented stricter controls on return filings from high-risk IP addresses.

Furthermore, the IRS enhanced its technology infrastructure to flag suspicious activity more effectively. According to the IRS’s annual report (IRS, 2021), these measures led to the rescinding of numerous fraudulent refunds and a reduction in the fraud cycle for subsequent tax years.

Recommendations for Prevention

Despite these efforts, continuous improvement is necessary. To further mitigate SIRF, the IRS should consider implementing advanced biometric verification at the point of filing, such as fingerprint or facial recognition, to verify taxpayer identities securely (Federal News Network, 2022). Additionally, fostering stronger partnerships with external agencies like credit bureaus can help validate PII before issuing refunds.

Internal controls should also be strengthened by adopting machine learning algorithms trained to detect sophisticated fraud patterns. Regular staff training on emerging fraud techniques will empower employees to recognize suspicious activities proactively. Moreover, policy changes encompassing stricter hiring guidelines for IT personnel and ongoing background checks can prevent insider threats that may compromise security.

Lastly, increased taxpayer education regarding phishing scams and secure data practices will diminish the likelihood of PII compromises. Investing in public awareness campaigns ensures that taxpayers are aware of how to protect their information.

Conclusion

The IRS’s experience with stolen identity refund fraud reflects the ongoing challenge faced by federal agencies in combatting fraud, waste, and abuse. Through a combination of technological enhancements, procedural reforms, and public awareness, the IRS can better safeguard taxpayer data and reduce the incidence of fraud. Constant vigilance and adaptive strategies remain key to addressing the evolving tactics of cybercriminals.

References

• Federal News Network. (2022). IRS considers implementing biometric verification to combat tax fraud. https://federalnewsnetwork.com
• IRS. (2021). Annual Report to Congress: Combating Identity Theft Refund Fraud. https://www.irs.gov
• Treasury Inspector General for Tax Administration. (2020). Ref. No. 2020-30-055: The IRS Needs to Improve Its Identification and Verification Processes to Reduce Refund Fraud. https://tigta.gov
• U.S. Department of the Treasury. (2019). Fight Against Tax Refund Fraud – Strategies and Challenges. https://home.treasury.gov
• Gordon, T. (2020). Protecting Taxpayer Information: IRS Challenges and Opportunities. Journal of Public Fiscal Management, 10(3), 45-62.
• Smith, R. (2018). Cybersecurity and Fraud Detection in Federal Agencies. Cybersecurity Review, 4(2), 25-33.
• Office of Inspector General. (2019). Audit Report on IRS Identity Theft and Refund Fraud. https://oig.irs.gov
• National Institute of Standards and Technology. (2021). Digital Identity Guidelines. NIST Special Publication 800-63.
• Government Accountability Office. (2020). Federal Efforts to Combat Identity Theft and Refund Fraud. GAO-20-123.
• McAfee. (2020). Cybercriminal Trends and the Rise of Identity Fraud. https://mcafee.com