WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley today introduced legislation to combat tax return theft by perpetrators who steal the identities of innocent Americans. The Tax Return Identity Theft Protection Act of 2016 strengthens penalties for identity thieves, establishes enhanced sentences for crimes against vulnerable and frequently targeted groups, and clarifies the state of mind proof requirement that has created an obstacle to holding some identity thieves accountable. Grassley’s bill comes as the deadline for submitting tax returns looms for many taxpayers.

“Tax refunds can be a silver lining for many Americans during tax season, but they’ve also attracted the attention of fraudsters and identity thieves. These crooks use stolen personal tax information to swoop in and seize the tax refunds of unwitting Americans early in the season before the victims ever file.  The crime is costing Americans billions of dollars annually, and can take many months to correct.  My bill discourages this unscrupulous behavior by increasing penalties, especially when the victim is particularly vulnerable,” Grassley said.

Identity thieves successfully stole $5.75 billion in fraudulent tax refunds in the 2013 tax year, according to Internal Revenue Service (IRS) estimates, with another $24 billion in theft that was prevented. Taxpayers whose returns were compromised wait 278 days on average for the account to be corrected and their return reissued.  Identity theft victims spend on average six months and $1,300 to correct their records.

Grassley’s bill seeks to deter tax return identity theft and other related fraud by increasing the maximum punishment for such crimes to a term of 20 years imprisonment.  In addition to tax return identity theft, these offenses include stealing a victim’s identity to conspire to defraud the government, file a false claim against the government, or steal public money, property or records.  The bill also enhances penalties for crimes against vulnerable groups that government watchdogs have identified as frequently targeted by identity thieves.  These groups include the aging and low income populations as well as members of the military.

The bill also clarifies that prosecutors need only to prove that an individual charged with identity theft under certain statues “knowingly” used a means of identification that was not legitimately issued to that individual, regardless of whether the individual knew that the identification belonged to another person.

Text of the Tax Return Identity Theft Protection Act of 2016 is available HERE.  A summary of the bill can be found HERE.

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