Each year, the Internal Revenue Service fights hard against phony tax refunds and identity theft, but despite blocking billions of dollars in fraudulent returns, a few billion still manages to slip through.
Sadly, the IRS has had some really bad news about this year’s tax return season: thanks to a couple of large-scale hacking events involving over a million Social Security numbers, the expected fraudulent payout in 2016 is around $21 billion. The battle against this type of crime just got a new ally, though—the entire US House of Representatives.
After House Rep. Jim Renacci (R-Ohio) tried to file his tax return only to discover that someone else had beaten him to it and filed in his name, he introduced legislation to Congress that would require the IRS to set up a system to help identity theft victims sort through the tax return problems that go along with identity theft.
It would also help streamline the procedure for informing suspected identity theft victims once “red flagged” returns are uncovered, but an even more interesting point involves the Treasury Department. Under this law, the Treasury will be charged with investigating the possibility of letting confirmed identity theft victims halt any electronic filing done in their names.
Of course, this isn’t Rep. Renacci’s first foray into identity theft legislation. A previous effort of his became part of a new tax law in December of 2015, and it requires employers to provide their workers’ W2 forms to the IRS that same day that they distribute them to the employees. This instant documentation is supposed to end the delay—sometimes as long as two months—that employers previously had, giving identity thieves even more time to sneak in a false tax return on unsuspecting citizens.
One interesting take away from the bipartisan effort was the acknowledgement on the part of some lawmakers that identity theft is a growing crime with a far-reaching base of criminals. The “olden days” of identity theft saw lone criminals who engaged in dumpster diving as a means of rooting out their victims’ data. Now, law enforcement and policymakers understand that the high-tech world of cybercrime and data breaches means there are whole crime rings and even organized cartels from around the world who have a hand in stealing citizens’ identities. That clearly shows that more involved preventive steps must be taken in order to fight such a concerted, organized effort.
Rep. Renacci’s bill passed the House with a voice vote, and it will go on to the Senate for approval.
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