Tempe, AZ (PRWEB) June 02, 2011
Recently, technology has been developed by Randall C. Sorensen, CPA that will help cure the gross overpayment of Earned Income Credit as the result of fraud. The Internal Revenue Service estimates that 23 to 28 percent of Earned Income Tax Credit payments are issued improperly each year, which equates to between $11billion and $13 billion of taxpayer money each year.
Earned Income Credit Fraud is a widespread problem. Randall C. Sorensen, CPA has practiced as a financial forensic expert for over 25 years. He first became aware of the ease with which individuals defraud EIC in 2004 when Mr. Sorensen encountered a case in his accounting firm featuring a Florida resident who was making a lost wage claim to an insurance company. Mr. Sorensen relates, “In reviewing her tax return, I determined that she reported $12,000 in income from her cleaning business. However, she had exactly $0 in expenses. No mops, brooms, cleaning supplies or gas to drive to her appointments.” Here is how the scam works:
- Claim $12,000 from phantom business
- Qualify for $4,300 earned income credit
- Pay related social security taxes of $1,700
- Receive net refund of $2,600
This translates into a 25 year cash payout of $65,000, social security retirement of $115,000 and medicare benefits of $120,000 for a grand theft of $300,000!
The program developed by Randall Sorensen is called the EIC Fraud Detective. This innovative program can test all 26 million EIC filers from 2010 in 24 hours. Mr. Sorensen states, “We estimate that EIC Fraud Detection could identify $2.1 billion in earned income credit fraud and cut the tax gap $800 million for a total savings of $2.9 billion in 2010. If we identify 1,000,000 EIC frauds per year for five years, we could save the US Treasury $44 billion!” In November 2010, Mr. Sorensen contacted the IRS and issued them a Three Billion Dollar Challenge. They have yet to respond. Mr. Sorensen challenges, “The IRS should take me up on my challenge. The IRS won’t have to invest a single dollar in technology that’s already proven. What does IRS have to lose?”
Randall Sorensen, CPA has been practicing accounting for over 30 years and has specifically worked as a forensic accountant for over 25 years. Randall Sorensen’s accounting firm is located in Tempe, AZ. Mr. Sorensen can be reached at 1-480-831-1169.