Investigating the IRS

In an extensive series of reports, Bob Segall and the WTHR investigative news team uncovered massive fraud costing American taxpayers billions of dollars. They also uncovered mismanagement and lack of oversight inside the Internal Revenue Service that allowed the fraudulent practices to go on. Acting on a tip from a tax preparer, WTHR found that large numbers of undocumented workers without Social Security numbers were filing tax returns using Individual Taxpayer Identification Numbers. ITIN numbers allowed them to claim additional Child Tax Credits of $1,000 per child with no limit to the number of credits so long as the children live in the United States with the taxpayer for at least six months a year. WTHR learned, however, that the children rarely lived with the taxpayers. The investigation then expanded to other states where those using the loophole confirmed the practice. Moreover, tax preparers inside the IRS reported that the problem was widely known. It was allowed to continue in order to assure that a required number of tax returns could be quickly processed. These reports led to dramatic and immediate results. After first denying any ability to correct the problems, the IRS soon announced extensive, permanent changes in agency practices and policies, changes that may save billions of dollars. For identifying and confirming both fraud and mismanagement, Investigating the IRS receives a Peabody Award.