The US Internal Revenue Service has inadequate controls over dishonoured cheques from taxpayers and is putting millions of dollars at risk. According to a report from the Treasury Inspector General for Tax Administration (TIGTA), payments that are subsequently bounced by the bank are not processed for various reasons. It said the IRS occasionally issues a refund to a taxpayer who had overpaid before realising the cheque has already been dishonoured. TIGTA estimates that the IRS was unable to stop more than $20m (£12m) in refunds from being erroneously issued to more than 14,000 individuals. The report says that, in general, it took the IRS about 40 days from the date of the original payment to reverse the cheque as dishonoured. Further complicating the process was the issuing of economic stimulus payments in 2008. Some taxpayers who were entitled to receive an economic stimulus payment stopped payment on their cheques, anticipating the 'stimulus' one would satisfy their tax liability. 'The IRS must develop an active system to prevent refunds for overpayments from being generated until it knows that the original payment has cleared the bank,' said TIGTA inspector general Russell George. 'That would protect approximately $102m over the next five years from being issued to taxpayers in error.'