I worked for the IRS from January of 1971 to November 1984. One of the first things I noticed when processing duplicate (amended) tax returns was the frequent use of Person A’s social security number by Person B to file a fraudulent tax return and get a fraudulent refund. It was very easy to determine which one was the phony taxpayer. I asked my supervisor if we could/should go after the faker, and she said “...No, that’s not our job...”. This was over 40 years ago! Somethings never change.
Years later, in my own tax practice I helped a neighbor’s sister get out from under a heavy tax assessment caused by two illegal aliens using her social security number in two other states. Of course those illegals didn’t file tax returns, so the IRS sticks my client with the tax bill claiming “...you didn’t report this W-2 income on your tax return...”. Of course she didn’t, it wasn’t her income! BTW, the illegals made more income than my client and paid ZERO taxes. I asked the IRS employee I dealt with if they could go after the two imposters and she said “..oh, we don’t know where they are...”. WTH! I said you have their W-2’s with their addresses on them and you know who their employer is, why don’t you just go pick ‘em up? “That’s not our job.” Any wonder why I quit such a lame outfit?
So one of my partners, a tax lawyer, says the spin on this story is all wrong. He says the IRS is withholding $$ with respect to the SSN but ... because it is fraudulent use of the SSN, there’s no matching returned filed. Ergo, no one ever comes back to claim those funds the IRS holds. He thinks the IRS collects billions $$ of this and thus doesn’t have any incentive to stop it (and further than DC knows this and doesn’t want to stop the revenue stream either). Does that make sense to you?