Fighting Tax Fraud With the IRS

If you’re like millions of Americans every year, you’d like your tax refund quickly—it’s money you count on. Unfortunately, not all tax returns are submitted by law-abiding citizens. The Internal Revenue Service (IRS) is under constant attack from criminals submitting bogus tax returns.

The agency needed a tighter net to catch fraudulent requests, while not slowing down the overall refund process. The IRS turned to Booz Allen to enhance its fraud detection program and manage its Electronic Fraud Detection System (EFDS). The improved system has saved the agency billions in potential revenue loss.

The EFDS is the agency’s first line of defense against scammers. It scans more than 240 million tax returns within hours of receipt and assigns a risk score. The risk score determines whether a return will be processed and, where appropriate, a refund issued, or whether the return requires further review.

For Booz Allen, the challenge was twofold: We needed to improve the system’s performance and enable ongoing modifications to an incredibly complex system, with minimal disruption.

Booz Allen’s team of consultants dramatically strengthened the agency’s ability to detect fraud. With business process improvements, we reduced fraud and lightened internal workloads by improving the quality of returns coming in from paid return preparers.

In addition, we created a streamlined process to implement more than 40 major software changes each year required by updates to the tax code. The enhancement focused on both software upgrades and organization and training for IRS staff.

To stay ahead of tax code changes that could create opportunities for fraud, we implemented new data models on a “fast track” basis in time for each tax filing season.