Death List Limits Set to Curb U.S. Tax Fraud by Identity Thieves
By Richard Rubin
Dec. 18, 2013
The U.S. government will limit public access to death records that have been used for years by identity thieves to commit tax fraud.
A provision in the budget bill poised to pass the Senate today would limit access to information in the Social Security Administration’s Death Master File to certified entities, such as life insurers and pension funds that use the data to combat fraud and administer benefits. The limits would apply for three years after an individual’s death.
“We’re going to save the U.S. government money that otherwise is being stolen,” said Senator Bill Nelson, a Florida Democrat.
The changes would save the government an estimated $786 million over the next decade by reducing fraudulent claims, according to the Congressional Budget Office. They also may keep genealogists from seeing the records immediately.
Nelson and other lawmakers have been trying for several years to limit access to the death records. On the Senate floor yesterday, he cited the cases of children whose identities had been stolen after they died.
In a typical case, the identity thief would file a tax return using a stolen Social Security number before the legitimate return could be filed, claiming a refund and plunging the real taxpayer’s family into months of limbo.
“Worrying about the stolen identity of a loved one is the last things a grieving family should do,” Representative Sam Johnson, a Texas Republican and chairman of the House Ways and Means Committee panel on Social Security, said in a statement.
According to the independent National Taxpayer Advocate, the annual caseload for the Internal Revenue Service’s identity theft unit increased 78 percent to 450,000 in fiscal 2012.
Thieves get taxpayers’ personal information in other ways, including stolen payroll records.
Companies such as New York Life Insurance Co., Equifax Inc. and Nationwide Mutual Insurance Co. have been lobbying Congress on the death list issue, according to Senate records.
The death records became public after the government settled a lawsuit in 1980. The government created the file and began selling it rather than responding to individual requests.
The legislation would exempt the records from the federal Freedom of Information Act and give the Commerce Department 90 days to set up a process to certify legitimate users. The public would get access to the data three years after an individual’s death.
In a statement, Utah Senator Orrin Hatch cited “confusion and ambiguity” during the legislative process and said there should be “balance” as Commerce officials write rules.
“We need a robust rulemaking process, where all interested parties are afforded the time and opportunity to adequately express their interests,” said Hatch, the top Republican on the Senate Finance Committee.
In the Senate yesterday, Nelson, Washington Democrat Patty Murray and Pennsylvania Democrat Bob Casey said the government shouldn’t interpret the law to cut off access immediately.
“It’s essential to strike the correct balance,” Casey said, adding that banks and investment companies in his state use the information.