Advocate questions freezing of refunds by IRS

WASHINGTON (AP) -- The Internal Revenue Service freezes tens of thousands of tax refunds it deems questionable without telling people that they're suspected of fraud, the nation's taxpayer advocate said Tuesday.
Taxpayer Advocate Nina Olson detailed the program, called the Questionable Refund Program, in her annual list of the worst problems facing taxpayers. Her office, which helps sort out disputes with the IRS, has seen a mounting number of people seeking help to claim frozen refunds.
"It is a central tenet of American law that the government must notify an accused person of the offense it suspects he committed and must give the accused person an opportunity to present exculpatory evidence to show his innocence," Olson said in her report.
Richard Speier, acting chief of the IRS Criminal Investigation office, said the tax agency is "very comfortable" that when it determines that someone committed a fraudulent act that "we do have that correctly identified."
Speier said the IRS acknowledges it could do a better job of communicating with these taxpayers. Overall, the program temporarily delays a small number of refunds but stops billions in false refunds from being paid to criminals, the agency said.
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