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Danny Werfel, Managing Director and Partner at Boston Consulting Group, discusses the new audit finding that the IRS has been successful in reducing fraud and identity theft

A new audit from the Treasury Inspector General for Tax Administration finds that the Internal Revenue Service has been successful in preventing fraud and identity theft, according to FCW. The efforts of the IRS prevented identity thieves from obtaining nearly $2 billion in the last payment year.

Danny Werfel, Managing Director and Partner at Boston Consulting Group and Former Acting Commissioner of the IRS, was glad to see a positive report from an Inspector General. “It’s a nice reminder that not every time that something is audited or investigated is the news bad,” he said. Another takeaway that Werfel got from the audit is that the IRS is a high-functioning organization and has caught up with entities and individuals attempting to defraud the government.

There has been a downward trajectory of funding given to the IRS, which Werfel said is counterintuitive, because investments made in the IRS have a positive return for the taxpayer. He explained that there is a perception that the IRS could go beyond their scope of enforcement if provided more funding, or that it has lost trust due to past scandal. Werfel said that the vast majority of the time, the IRS works with high integrity.

Other agencies can learn from what the IRS did, Werfel said. Two major strategies that the IRS did are using forensic analytics to profile returns that were higher-risk for identity theft, and taking advantage of public-private partnerships.

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