Saturday, February 10, 2007

Can you trust the IRS? (X-Rated)

I noticed something new this year on the first return I prepared for which the taxpayer wanted a check mailed to him instead of a direct deposit to his bank account. Lines 74a and 74b on page 2 of Form 1040 have a place to enter your bank routing number and account number. When I printed the tax return I noticed these lines were filled in with XXXXXXXX. At first I thought this must be a flaw in my tax software.

After making inquiries, someone suggested that it might be something the IRS asked tax software companies to add to these lines. But why? The reason suggested was that some unscrupulous IRS employees might fill in their own bank account numbers if these lines were left blank.

Has this actually happened? I don't know and the IRS isn't likely to admit that your confidential information isn't safe in their hands.

This brings some related risks to my mind.

  • Don't make your check out to 'IRS" Some female employee at the IRS might change the "I" in IRS to "M" then add 'rs' and the check would then be to Mrs. XXX.
  • Be cautious in selecting a tax preparer. I heard that some employee of a large tax-preparation company was caught after having using the clients' information such as credit card numbers and social security numbers in an identity theft scheme
Where there is a will, there is a way----to cheat.

LINKS and References – go to

IRS References


This information is not intended to be advice to the recipient. In compliance with Treasury Department Circular 230, unless stated to the contrary, any Federal Tax advice contained in this Blog was not intended or written to be used and cannot be used for the purposes of avoiding penalties.

1 comment:

Ulli...The Wall Street Bully said...

Thanks for sharing this. With fraud being rampant, it pays to be on guard all the time.

Especially with the many stolen checks from outgoing mail left in the mailbox, making a check payable to simply "IRS" is asking for trouble.