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Castor Announces Progress in Combating Identity Theft and Tax Fraud

Location: Tampa, FL

Tampa, FL - U.S. Rep. Kathy Castor detailed today the progress made in the fight against identity theft and tax-related crimes, and announced the filing of new legislation to continue the momentum. Together with Rep. Rich Nugent, Tampa Police Chief Jane Castor and local law enforcement, Castor has pressed successfully for strong action from the IRS.

"Two years ago, our local police uncovered a massive tax fraud scheme, so Rep. Nugent and I sat down with Tampa police in September 2011 to help develop to plan to tackle tax refund fraud," Castor said. "It was clear that we needed to raise awareness at the IRS and work to increase communication and cooperation, enhance prevention measures, and step up enforcement and prosecutions."

Castor and Nugent filed a bill last congress to require greater cooperation and information-sharing between the IRS and local law enforcement, to expedite resolution for victimized taxpayers, to increase penalties for identity theft in connection to tax crimes, institute a pilot program for a unique PIN system, protect the Social Security Death Master File, and reallocate resources within the IRS to tackle tax refund fraud.

In addition, the American Tax Relief Act of 2012 passed Jan. 1 contained a provision that targeted fraudulent refund claims by prisoners, a problem that had skyrocketed over recent years.

"Congress reinstituted the law that requires tax information sharing between the IRS and prisons to address the significant problem of fake tax claims by inmates," Castor said. "This year, all federal and local partners must build on the progress, continue to prevent tax fraud and help identity theft victims."

A recent update by the IRS shows how far they have come since Castor, Nugent and Tampa Bay area law enforcement officials began pressing for change. In a recent conversation, Beth Tucker, IRS Deputy Commissioner for Operations Support, advised Rep. Castor how the IRS has made identity theft and fraudulent tax returns a top priority. She shared the following information regarding improvements in enforcement and prevention as a result of administrative actions:


· Increases from 2011 to 2012

o 70% increase in investigations

o 60% increase in cases recommended for prosecution

o 67% increase in prosecutions

o 223 people sentenced in 2012 versus 80 in 2011

· Task Force pilot program working to share information across all levels of law enforcement

· Waiver program allows tax payers to release information to be used in law enforcement investigations

o Program expanded to New York, New Jersey, Pennsylvania, Georgia, Alabama, Texas, Oklahoma, California


· 770,000 PINs issued for previous victims (up from 250,00 in 2011)

o Extra layer of protection for taxpayers to prevent anyone from filing a return using their social security number unless they have this unique PIN

· New screens to flag possible fraudulent returns for further investigation

o Multiple returns to same bank account

o Multiple returns to same mailing address

o Excessive or inconsistent claiming of tax credits

· IRS working with state departments of revenue

o Study to determine if earlier data acquisition will lead to prevention

o Example: Compare actual W-2 information sent to taxpayer with information used on return

o Can also help taxpayers catch honest mistakes earlier and avoid fines

"The IRS has already implemented many of the provisions in our legislation. Nevertheless, we need additional taxpayer protections and the progress should be codified and penalties increased. We will continue to press the IRS to stop the issuance of fraudulent returns and file our Tax Crime and Identity Theft Prevention Act as our first bill this congress," Castor continued.

"The enforcement numbers are a clear warning shot across the bow to criminals," noted Tampa Police Chief Castor said. "We are serious about stopping this crime, and law enforcement will come after you."

"We applaud the improvements and administrative actions by the IRS," Castor said. "However, we must not lose any momentum or leave our local law enforcement without the tools and backup they need."

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