Nomination of Michelle T. Friedland to Be US Circuit Judge for the Ninth Circuit

Floor Speech

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Mr. President, I rise today to urge my colleagues to pass the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2013. With tax day coming upon us on Tuesday, the time is now to pass this bipartisan legislation.

I worked on the STOP Identity Theft Act to address the growing problems of tax identity theft and to protect taxpayers against fraud.

From the beginning this bill has been bipartisan. Senator Sessions is the lead Republican on this bill, and in fact recently this bill passed the Senate Judiciary Committee on a vote of 18-0. Given the number of members on the committee with very different views on issues, that is an accomplishment and shows what a pressing problem this is.

I think people will be pretty shocked, as you will be, Mr. President, when you hear these numbers. Criminals are increasingly filing false tax returns using stolen identity information in order to claim victims' refunds. You might think that would be a rare incident, but as a former law enforcement person, as the attorney general for the State of New Mexico, I think you know anything can happen. This is a problem where more than anything is happening.

In 2012 alone, identity thieves filed 1.8 million fraudulent tax returns, almost double the number confirmed in 2011. The numbers and the documents in these cases may be forged, but the dollars behind them are real, because in 2012 there was another 1.1 million fraudulent tax returns that slipped through the cracks, and our U.S. Treasury paid out $3.6 billion in the fraudulent returns--$3.6 billion. That is the number coming from the IRS. That is your taxpayer dollars going down the drain to people who are actually stealing taxpayers' identities, putting them on returns, filing returns, and getting back the money.

When criminals file these tax returns, it is not just the Treasury that loses out. Everyday people are the real victims here, because when someone else uses your identity, when someone else fakes your identity, people are then forced to wait months and sometimes even years before receiving their actual refund.

So what is going on? Well, we are having double refunds, right? First they go to the thief. This is happening millions of times. Then the real taxpayer says: Wait a minute, where is my refund, and files a return. The government has to check this out and figure out the first one and they then pay twice. This is what is happening in the United States of America.

In 2012, Alan Stender, a retired businessman from the 5,000-person town of Circle Pines, MN, was working to file his taxes on time just as people are doing right now. After completing all the forms and sending in his tax returns, Alan heard from the IRS that there was a major problem. So he gets it done on time and files the return and finds out from the IRS there is a problem. Someone had stolen his identity and used his personal information to fraudulently file his taxes and steal his tax return.

Just last week 25 people were arrested in Florida for using thousands of stolen identities to claim $36 million in fraudulent tax refunds. This included the arrest of a middle school food service worker who sold the identities of more than 400 students, if you can believe it. Those victims are just kids, and criminals are stealing their identities to file fake returns.

Are you ready for this one? Attorney General Eric Holder recently revealed that he was a victim of tax return identity theft. This came out this week. Two young adults used his name, his date of birth, and Social Security number to file a fraudulent tax return. They got caught. They were prosecuted. But if you can imagine that this can happen to the Attorney General of the United States--at least we got action there--think about some guy in Circle Pines, MN, who has it happen. As I said, it is happening over a million times every year, from a retired man in Minnesota to middle school students in Florida, to the Attorney General of the United States. It is clear that identity theft can happen to anyone.

We also know this crime can victimize our most vulnerable citizens, victims such as seniors living on fixed incomes or people with disabilities who depend on tax returns to make ends meet and cannot financially manage having their tax returns stolen. There is a lot at stake here and action is needed. That is why I put forward the bipartisan legislation a few years back with Republican Senator Jeff Sessions of Alabama, to take on this problem and crack down on the criminals committing this crime. There was also significant bipartisan work in the House last year. A very similar bill was passed in the House that did the same thing, passed bipartisan bills in the House of Representatives. It happened. And the Senate now, as we know, passed it 18-0 out of the Judiciary Committee.

This critical legislation will take important steps to streamline law enforcement resources and strengthen penalties for tax identity theft. The STOP Identity Theft Act will direct the Justice Department to dedicate additional resources to address tax identity theft. It also directs the Department to focus on parts of the country with especially high rates of tax return identity theft and to boost protections for vulnerable populations such as seniors, minors, and veterans.

We also urge the Justice Department to cooperate fully and coordinate investigations with State and local law enforcement organizations.

Identity thieves have become more creative and have expanded from stealing identities of individuals to stealing that of businesses and organizations. My bill recognizes this change and broadens the definitions of tax identity theft to include businesses, nonprofits, and other similar organizations. This is important because once a company or an organization's tax information is stolen, it can be used to create fraudulent tax returns and claim false refunds.

Finally, we need to crack down on the criminals committing this crime. This bill would strengthen tax identity theft penalties by raising the maximum jail sentences from 15 to 20 years. I believe this bill goes a long way in helping law enforcement use their resources more efficiently and effectively and it is time to bring it to the floor.

In recent weeks we have made significant progress, as I said, by passing the bill out of the Senate Judiciary Committee unanimously on an 18-0 vote. It doesn't happen often. I thank all of my colleagues on the committee and all of my friends across the aisle for joining with us to vote for this bill. After a long discussion we had amendments. We got this bill. Every single member of the Judiciary Committee voted for this bill, including Senator Cruz, Senator Schumer, Senator Feinstein, and Senator Hatch. It was a unanimous 18-0 vote.

Now I want to bring this bill to the full Senate. I would love to get this done before tax day. I know there is a holdup on the other side of the aisle, and it is time for people to understand that this is a bill that passed the House of Representatives, it passed on an 18-0 vote out of Judiciary, and we simply need to get this done.

When the Attorney General of the United States of America is having his identity stolen and his identity is used to file fake tax returns, we have a problem. We have a problem that involves a lot of money. We have a problem that involves 1.8 million fraudulent tax returns in 2012 alone, double the number in 2011. We have a problem that also involves a lot of money. We have a problem that involves $3.6 billion in 1 year alone in 2012, paid out by the U.S. Government. What do you think taxpayers think when they hear that, that $3.6 billion went to thieves and we have a bill that passed out of the Judiciary Committee 18-0? I would want someone explaining why they are holding up this bill.

It is time to get this bill done. I would love to see it happen before we go back to our home State so I can explain it to my constituents, and I hope our colleagues on the other side of the aisle will work with us. Because with tax season upon us, it is time to pass this bipartisan legislation, to crack down on identity thieves and protect the hard-earned tax dollars of innocent Americans. The time to do it is now.

I again thank Senator Jeff Sessions for being the Republican on this bill, and I thank all my colleagues for passing it through the committee. I thank the House for getting it done over there. It is now the time to pass it in the Senate.

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