U.S. Senator from Minnesota Urges IRS to get Strict on Tax Refund Fraud

Published On: 29th November 2014

From the internet

One U.S. Senator from Minnesota is urging the IRS to crack down on tax refund fraud.

Amy Klobuchar (D-MN) is making this plea because of the rise in tax refund fraud in recent years.

Klobuchar is part of a bipartisan group that consists of 15 senators and this group sent a letter to the IRS Commission, calling on the agency to make the reduction in fraud a priority.

Because a lot of tax refund fraud has to do with identity theft, Klobuchar is a major supporter of a crackdown. In fact, she introduced the STOP Identity Theft Act to help combat identity thieves and give victims the protection that they need by focusing the resources of law enforcement on the issue. The STOP Identity Theft Act also calls for increasing the penalties for identity theft. Companion legislation has been passed by the House of Legislation.

One of the reasons why it is very important for identity theft to be combated is because of the billions of dollars that are at stake. It is understood that the IRS may not be able to stop all tax refund fraud, but a lot can be done within the current authority of the IRS to reduce the risk of refund fraud and improve services to taxpayers.

In cases of widespread fraud across the U.S., criminals use stolen personal information. If they find out a person’s Social Security number, then a person can have the capability to file a false tax return before the real taxpayer files theirs. This means that the fraudster gets the tax refund. The victims then experience long delays in receiving the refund that they should have received.

The STOP Identity Theft Act would enable the Department of Justice to contribute resources in areas where there is a high rate of identity theft related to tax refunds. They would coordinate investigations with local and state law enforcement agencies. The bill would then increase the maximum jail sentence from 15 years to 20 years, as well as expand the definition of identity theft to allow for prosecutors to pursue cases where businesses and organizations are fraud victims.

In the letter to the IRS, they were asked to explain what resources they have to combat identity theft, as well as what resources they have to find a solution to the problem. They have also been asked to explain how they prioritize their resources and how they plan to allocate resources in the future to fix the problem.

The IRS has even been asked to state how many tax payers filed affidavits that alleged refund fraud or identity theft.

There were a total of six points made that the IRS has been asked to explain and recommendations have also been made. One of the goals is for the IRS to assess the costs and benefits of accelerating information matching and investigation.

The IRS was asked to send their responses in a timely manner before another tax season passes by and billions more taxpayer dollars stolen.