One of the most disturbing pieces of news out of the IRS lately is identity theft-related tax refund fraud. This crime is growing, with $5.2 billion lost to fraudulent tax returns in 2013, according to the nonpartisan Government Accountability Office (GAO).
Identity theft is devastating for victims. You don’t have to look far for firsthand experiences of the nightmare of paperwork to be filed and credit score dings for those trying to rebuild their financial profile after such theft. In addition to hurting the individual victims, identity theft involving tax fraud harms the taxpayers at large who are bilked out of billions of dollars.
The IRS’ number one job is maintaining the integrity of the tax system. That means ensuring taxpayers pay what they owe, not a penny more, not a penny less, and that thieves have as little opportunity as possible to exploit the tax system for their nefarious gain.
The IRS realistically can’t prevent every instance of fraud, but it sure looks like the IRS has fallen down on the job here.
A bipartisan group of fellow senators and I have identified a number of steps the IRS should be taking to curb identity theft-related tax fraud. We asked the IRS to account for each of these steps and sought answers to questions aimed at preventing another disastrously big fraud number. In closing our letter to the IRS commissioner, we wrote, “It is essential to stem the tide of this crime before another tax season passes by and billions more taxpayer dollars are stolen.”