WASHINGTON, DC – U.S. Senator Amy Klobuchar has introduced legislation with a group of other senators to combat identity theft-related tax fraud. According to the Internal Revenue Service (IRS), more than 1.8 million people were victims of tax-related identity theft in 2015 alone, including over 13,400 in Minnesota. A Treasury Inspector General for Tax Administration report found that in 2013, taxpayers whose identities were stolen waited on average over 9 months to get their claims resolved by the IRS—with some waiting as long as two years. The Identity Theft and Tax Fraud Prevention Act would deter criminals who commit tax fraud using a stolen identity by increasing penalties on both identity thieves and on paid tax preparers who fail to keep taxpayers’ identifying information secure.
“Tax identity theft wreaks havoc on peoples’ lives and costs taxpayers billions of dollars,”Klobuchar said. “With tax season upon us, there’s no time to waste. Our legislation would help us take action now to punish identity thieves and protect peoples’ hard-earned tax dollars.”
The act would:
Improve the ability of the IRS to prevent tax identity theft and tax refund fraud and reduce the burden on taxpayers who are victims of tax identity theft.
Direct the IRS to speed up the time it takes for the agency to resolve identity theft cases by requiring the agency to create and implement a more streamlined process for handling tax identity theft cases.
Expand the IRS PIN program designed to provide taxpayers an extra level of security.
Create a new office in the IRS to work with State and local law enforcement on tax-related identity theft and other tax fraud matters.
Increase the maximum fine criminals could face for filing a fraudulent tax return with someone else’s identity from $100,000 to $250,000.
Increase the penalty for tax preparers for tax preparers who fail to protect their clients’ information from $250 per incident to $1,000.
Senators Bill Nelson (D-FL), Ben Cardin (D-MD), Bob Casey (D-PA), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), and Kirsten Gillibrand (D-NY) introduced this legislation with Klobuchar.
For more information on tax fraud, visit the IRS and Minnesota Department of Revenue websites.