Taxpayers falling victim to identity theft
Friday, April 11, 2014 9:59 AM
In 2012, a retired businessman from Circle Pines named Alan Stender was working to file his taxes on time. After completing all the forms and sending in his tax returns, Alan heard from the IRS there was a major problem. Someone had stolen his identity and used his personal information to fraudulently file his taxes and steal his tax return.
This year, people across the country will receive the same alarming news Alan did as millions of Americans will fall victim to tax identity theft.
Using information such as Social Security numbers, criminals are electronically filing false tax returns before the legitimate taxpayer in order to steal the taxpayer's refund. This not only costs the government billions of dollars in waste, but also robs innocent Americans of their hard-earned tax refunds.
While Alan's situation was frustrating, we also know this crime can also victimize our most vulnerable citizens. Victims such as seniors living on fixed incomes or people with disabilities depend on tax returns to make ends meet and cannot financially manage having their tax returns stolen.
Unfortunately, this problem only continues to grow. In fact, between 2011 and 2012, the number of identity theft tax returns almost doubled affecting more than 1.8 million tax returns. That's in addition to another 1.1 million tax returns that might have had these identity theft problems but were not caught. In all, the government paid out $3.6 billion in stolen tax returns in 2012!
There is much at stake and action is needed. That's why I have put forward bipartisan legislation with Republican Sen. Jeff Sessions of Alabama to take on this problem and crack down on the criminals committing this crime. The STOP Identity Theft Act would take important steps to streamline law enforcement resources and strengthen penalties for tax identity theft. In recent weeks we have made significant progress by passing this bill out of the Senate Judiciary Committee on a bipartisan 18-0 vote.
My bill will direct the Justice Department to dedicate additional resources to address tax identity theft. It also directs the department to focus on parts of the country with especially high rates of tax-return identity theft and to boost protections for vulnerable populations such as seniors, minors, and veterans. We also urge the Justice Department to cooperate fully and coordinate investigations with state and local law enforcement agencies.
Identity thieves have become more creative and have expanded from stealing the identity of individuals to stealing that of businesses and organizations. My bill recognizes this change and broadens the definition of tax identity theft to include businesses, nonprofits and other similar organizations. This is important because once a company or organization's tax information is stolen, it can be used to create fraudulent tax returns and claim false refunds.
Finally, we need to crack down on the criminals committing this crime. My bill would strengthen penalties for tax identity theft by raising the maximum jail sentence from 15 to 20 years.
But it will take more than just legislation to put a stop to this crime. All Minnesotans can take steps to protect themselves. According to the IRS, you should always keep your Social Security card at home in a safe spot, avoid providing your Social Security number to a business unless it is required, check your credit report regularly, and never provide personal information to anyone unless you initiate the contact either over the phone, snail mail, or email.
If you believe you are the victim of tax identity theft, the best thing to do is contact the IRS at 800-908-4490. You can also reach out to a local IRS taxpayer advocate at (651) 312-7999. Taxpayer advocates are well-versed in handling these cases and are available to assist victims of fraud.
As Minnesotans across the state work to file their taxes on time, we need to take action against tax identity theft. If a retired businessman from Circle Pines can fall victim to this crime we know it can happen to anyone. That's why I will keep pushing to make sure my bill becomes law so we can crack down on identity thieves and protect Minnesotans from this crime.