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Stopping Tax Offenders and Prosecuting Identity Theft Act of 2012

Floor Speech

Location: Washington, DC


Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may consume.

I am pleased to be an original cosponsor of H.R. 4362, the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2012, with my good friend and colleague, the distinguished gentlewoman from Florida, Debbie Wasserman Schultz. This is a bipartisan bill that strengthens criminal penalties for tax return identity thieves.

Tax fraud is a very real problem, and Congress should do all it can to protect citizens from this costly crime. Tax fraud through identity theft is a rapidly growing criminal enterprise in the United States. Criminals use stolen identities to steal income tax refunds from unsuspecting victims and from the Federal Government.

With nothing more than stolen identity information--Social Security numbers and their corresponding names and birth dates--criminals have electronically filed thousands of false tax returns and have received hundreds of millions of dollars in wrongful refunds.

The thieves deceive the Internal Revenue Service and file a return before the legitimate taxpayer files. The criminals then receive the refund, sometimes by check but often through a convenient but hard-to-trace prepaid debit card. The criminals then wait for the mail to deliver the cards and checks at abandoned addresses. According to reports in the media, postal workers have been harassed, robbed, and, in one case, murdered as they have made their rounds with their mail truck full of debit cards and master keys to mailboxes.

Tax thieves victimize innocent taxpayers in a number of ways. These thieves will file fake returns under a false name or claim someone who is no longer living as a dependent on their own forms. Often, the fraud is not detected until an individual files a tax return that is rejected by the IRS because someone else has already falsely filed and claimed their return.

The IRS has detected 940,000 fake returns for 2010 alone, from which identity thieves would have received $6.5 billion in refunds. And those are just the ones they caught early. It is estimated by the IRS that they missed an additional 1.5 million returns with possibly fraudulent refunds worth more than $5.2 billion. The number of these cases has increased by approximately 300 percent every year since 2008.

H.R. 4362 is a bipartisan bill that strengthens criminal penalties for tax return identity thieves. It adds tax return fraud to the list of predicate offenses for aggravated identity theft and expands the definition of an ``identity theft victim'' to include businesses and charitable organizations.

H.R. 4362 also improves coordination between the Justice Department and State and local law enforcement officials in order to better protect groups that are most vulnerable to tax fraud from becoming future victims. The changes to Federal law proposed by H.R. 4362 are important to keep pace with this ever-increasing crime.

Tax identity theft costs American families and taxpayers millions of dollars each year. It also results in confusion and needless worry, as taxpayers must work to correct the ID problem created by the false filers. It is critical that we take further steps to reduce the number of people who are victimized by this crime.

Again, I want to thank Congresswoman Debbie Wasserman Schultz for her great work on this issue, and I urge my colleagues to join me in support of H.R. 4362.

I reserve the balance of my time.


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