Identity theft has become an epidemic that has affected thousands of Americans across the country.
One piece of legislation aimed at addressing the problem of tax return identity theft is the Stopping Tax Offenders and Prosecuting Identity Theft Act (H.R. 4362), introduced in April by U.S. Reps. Debbie Wasserman Schultz (FL-20) and Lamar Smith (TX-21). The bill brings together several measures to strengthen criminal penalties and increase the prosecution rate of tax return identity thieves.
On Thursday Wasserman Schultz's bill got one step closer to becoming a law when it was discussed in the U.S. House Committee on the Judiciary during a hearing in the Subcommittee on Crime, Terrorism and Homeland Security. The hearing focused on identity theft and income tax preparation fraud, and a panel of witnesses testified about these growing crimes.
"We have seen countless news stories about how tax refund identity theft is on the rise across the country, particularly in my district in South Florida." said Rep. Wasserman Schultz. "We must do something to protect Americans from ever having to go through the headache of identity theft. This is why Chairman Smith and I have introduced legislation that protects Americans and their tax dollars, while discouraging would-be thieves from perpetuating this crime."
Chairman of the Judiciary Committee, Lamar Smith spoke at the hearing and stressed the importance of focusing on the issue of tax return identity theft and how this bill will help combat these types of crimes.
Among the panel of witnesses for the hearing was Sanford Zinman, the national chair of the Tax Committee of the National Conference of CPA Practitioners. He spoke in support of Rep. Wasserman Schultz's bill, noting that in 2009, the Identity Protection and Specialized Unit (IPSU) of the IRS had a total of 80,637 cases, and in 2010 the number of cases increased to 184,839. By 2011, the caseload increased to 226,356. The drastic increase in cases over just two years shows the magnitude of the tax return identity theft problem, and why federal legislation like Wasserman Schultz's bill is needed immediately.
Additional witnesses at the hearing included Rebecca Sparkman, the Director of Operations Policy and Support of the IRS Criminal Investigation Division, Nina Olsen of the National Taxpayer Advocate and Michael Robinson, a victim of tax preparation fraud.