As tax day approaches, many Minnesotans will find themselves a victim of tax identity theft.
U.S. Senator Amy Klobuchar (D-Minnesota) is sponsoring legislation that would help combat scammers, like the ones that targeted Bloomington Public Schools recently.
2,800 current and former employees had their information compromised this past February when their W-2 forms were released to a scammer.
According to Bloomington Public Schools, an employee in the finance department responded to an email that appeared to be from a colleague, compromising sensitive personal information.
Doneva Batty, a teacher at Valley View Middle School in Bloomington, says she signed up for the free one-year identity protection offered by the district after the incident, but the damage was already done. She was recently notified that someone had already tried to claim her return.
“I’m going to be spending the rest of my life checking my credit reports in fear of what could happen to me,” said Batty.
Tax identity theft is becoming more and more prevalent in the U.S., with 1.8 million people victimized in 2015. The latest numbers estimate the IRS paid scammers $3 billion in 2014.
“Some of that money has probably gotten back, but a lot of it hasn’t been and that just shows why we’re talking about putting resources in on the front end,” said Sen. Amy Klobuchar who supports directing additional funds to the IRS to help combat fraud.
The Identity Theft and Tax Fraud Prevention Act was introduced in March, and promises to deter criminals while giving the IRS more resources.
Senator Amy Klobuchar was in St. Paul Friday, promoting the legislation.
“Because this is still going on despite [IRS] efforts, they need to one, put more people on this and two, speed up the time it takes to get the tax refund to the tax payer,” said Klobuchar.
According to the senator’s website, the bill 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.