Introduction of the Taxpayer Identity Protection Act of2014

Floor Speech

Mr. McDERMOTT. Mr. Speaker, I rise today to introduce the Taxpayer Identity Protection Act of 2014.

This bill will help cut down on tax fraud from identity theft, a serious problem that costs the government billions of dollars annually. My bill would truncate Social Security Numbers on Forms W-2, and the Joint Committee on Taxation estimates that implementing it would have a negligible revenue effect.

At the moment, W-2 forms contain a person's full Social Security Number, making it easy for someone to steal an identity. This bill would give the IRS the authority to shorten Social Security Numbers on W-2 forms, making it tougher for a person's identity to be stolen if their W-2 ends up in the wrong hands.

The Treasury Department wrote in the Greenbook that ``the risk of identity theft from Form W-2 is high because employers are required to file a Form W-2 for each employee who receives wages.'' It added that, ``providing the IRS authority to require or permit truncated SSNs on Forms W-2 would reduce the risk of identity theft and improper payments resulting from false or fraudulent returns.''

In 2010, a Treasury Inspector General for Tax Administration (TIGTA) report estimated that ``$21 billion in potentially fraudulent refunds'' would be issued over the next five years as a result of identity theft. The report noted that this estimate is likely conservative.

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