Agency expands its robo‑audits to get more personal data…

but has so far only netted small change.

The Internal Revenue Service relies on technology more than ever to sniff out tax cheats using robo‑audits and data mining – but so far it has caught lot of minnows, and big fish are still eluding detection. Even as millions of people’s accounts are screened online and matched against their digital files elsewhere, the IRS’s data‑detection tools comes nowhere close to collecting the $400 billion in tax dodges estimated to take place every year. The area in which its robo‑audits have had the most impact is on tax returns for low‑income taxpayers who try to claim the Earned Income Tax Credit (EITC). In total, fraudulent claims totaled $2 billion, just 0.01 percent of the total of individual taxes. The EITC was the biggest single compliance problem cited.

That amount is expected to rise in the tax year ahead as the IRS extends the use of data mining to include the personal data of millions more taxpayers. Its sophisticated data‑matching and pattern‑recognition technology, largely developed by IBM over the past decade, will reach up the income ladder to include more middle‑income and Read More