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Public Statements

Joint Hearing of the Oversight Subcommittee and Social Security Subcommittee of the House Ways and Means Committee - Identity Theft and Tax Fraud

Statement

By:
Date:
Location: Washington, DC

Chairman Boustany, I want to thank you for holding this hearing regarding identity theft and its role in the growing crime of tax fraud.

Earlier this year, the Subcommittee on Social Security held a hearing on Social Security's death records, including the so-called Death Master File, a publically available listing of the personal information of those who have died, including their Social Security numbers.

We learned that the Death Master File serves as a readily available source of information identity thieves need in order to file fraudulent tax returns.

We heard the heartbreaking story of the Agin family, whose four year old daughter Alexis had her identity stolen shortly after she passed away. Only when their tax return was rejected by the IRS, did the Agins learn that an identity thief had already filed a return claiming their child as a dependent.

No grieving family should bear this additional burden, yet when the Agins reached out to the community of grieving cancer parents, within the first hour they heard from 14 families who had lost a child whose Social Security number was also stolen.

I'd like to welcome Alexis's father, Jonathan Agin, who has joined us in the audience today and thank him for his tireless efforts to stop identity thieves from accessing the Death Master File.

So why does the Federal government make public the Social Security numbers and other personal information of those who have died? Turns out it's required, unless Congress changes the law.

Social Security collects death information so it can stop benefits to those who have died and start benefits for their survivors.

But a 1980 Freedom of Information Act court-mandated settlement required Social Security to also make information about deceased Social Security number holders available to the public. In response, Social Security created the Death Master File.

With 84 million listed individuals and 1.5 million new individuals added each year, many groups now purchase the Death Master File from the Commerce Department including government agencies, credit reporting agencies, financial institutions, law enforcement organizations, and medical and genealogical researchers.

But the decades old practice of publishing personal death information that anyone can buy needs to end and now. In the age of the internet, identity thieves can all too easily get their hands on a Social Security number and reap instant rewards, and no one, including the person whose number it is, knows what has happened.

ID Analytics, a fraud prevention firm, recently released a study comparing death information from the Death Master File to applications for credit products and cell phone services.

The study found that the identities of nearly 2.5 million deceased Americans are used by fraudsters to commit identity theft each year.

Identity theft is also a growing problem on the tax front. The Treasury Inspector General reports that the IRS stopped $6.5 billion in false refunds in 2011, but that much more went undetected.

Taxpayers who are victims of tax identity theft have to endure a long process of proving their real identities, submitting paper returns and waiting months to get their rightful refund. This is just plain wrong.

To help stop this crime, I, along with a number of my colleagues, introduced H.R. 3475, the "Keeping IDs Safe Act of 2011." Our bill ends the publication of the Death Master File, denying criminals easy access to the personal information of those who have died.

Make no mistake we will stop these identity thieves and in doing so protect the American taxpayer and prevent other families from having to go through what the Agins did.

I want to thank all our witnesses for coming today and I look forward to hearing their testimony.


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