"We were being told by upper management to ignore fraud, to assign ITIN numbers and ... pay out refunds to people who are lying," Howard explained. "It's a license to steal when you allow that."
Howard and five other tax examiners at the ITIN processing center in Austin all told WTHR the same thing: for years, IRS managers have instructed them to "look the other way" while processing ITIN applications that appear to be filed fraudulently – even when those applications contain clear signs of criminal activity.
For example, Howard received a stack of ITIN applications for dozens of children attending the same school in South Carolina. (Adult tax filers can request an ITIN for a child if they want to claim that child as a dependent in order to get child tax credits and a larger tax refund.) When he researched that school, he discovered it didn't even exist. When Howard reported the apparent scam to his bosses, he claims his managers ordered him to approve the applications anyway.
"C'mon. This is fraud! Those kids weren't even real and I'm supposed to give out [ITIN] numbers?," Howard recalls asking. "We're tax examiners but the truth is we're not supposed to look into anything. We're not supposed to examine anything. It's like an assembly line. It's just ‘Get it out of here. Boom. Boom. Boom. Get it out of here and don't worry about the fraud. Fraud slows us down.'"
After years of reporting that fraud directly to his bosses -- with no success -- Howard decided to take drastic action.
"I've been working for the federal government for 23 years and I signed an ethical standard of conduct when I went to work that says if you see fraud, you need to report it. I tried and tried and tried, couldn't get anywhere so … I went into a quiet room and started making phone calls."
Those phone calls went to the Inspector General's office in Washington, D.C.According to Segall, the Inspector General's office is expected to release the findings of its examination of the problem this summer. IRS officials refused to discuss the problem with Segall. For the whistleblower, Segall reports that he is being punished by the IRS for speaking out publicly about the problem.
Simply by speaking out, the quiet tax examiner could save taxpayers billions -- but at a personal cost.
A few days after Howard met with WTHR, the IRS slashed his job performance rating which will affect his paycheck. The IRS claims every aspect of Howard's job performance dropped during the past six months, shifting his overall rating from "exceeds fully successful" to "minimally successful." Howard believes the poor review is retaliation for blowing the whistle on his managers. He wonders what might happen next.
"I'm a little nervous, but not really. I guess they could try to fire me, but I don't think they will," he said, vowing to continue his fight for ITIN reform. "I just want to see things fixed. We've been allowing the U.S. taxpayer to get robbed for years now and those days appear to be over."Proving once again that the only people who get ahead in this country are the people who lie, cheat and steal.