U.S. Sen. Bill Nelson (D-FL) today reintroduced legislation aimed at combating ID theft-related tax fraud.
The legislation seeks to deter criminals who commit tax fraud using a stolen identity by increasing penalties on both identity thieves, and on paid tax preparers who fail to keep taxpayers’ identifying information secure. It would also expand the agency’s PIN program designed to provide taxpayers an extra level of security, and would direct the IRS to speed up the time it takes the agency to resolve ID-theft cases so victims can get their refunds sooner.
“These fraudsters are costing taxpayers hundreds of millions of dollars every year,” Nelson said. “This bill would help us crack down on these thieves, while also making it easier for those whose identities are stolen to get the refunds they’re owed.”
Nelson’s bill would increase the maximum fine criminals could face for filing a fraudulent tax return with someone else’s identity from $100,000 to $250,000. It would also increase the penalty for tax preparers who fail to protect their clients’ information from $250 per incident to $1,000.
According to the IRS, more than 1.8 million people were victims of tax-related identity theft in 2015 alone – including over 190,000 people in Florida, more than any other state.
A Treasury Inspector General for Tax Administration report released that year found that in 2013, taxpayers whose identities were stolen waited, on average, over 9 months to get their claims resolved by the IRS – with some waiting as long as two years.
To speed up the time it takes the IRS to resolve these type of claims, Nelson’s bill would require the agency to create and implement a more streamlined process for handling ID theft cases.
The legislation, which Nelson filed today, now heads to the Senate Banking Committee for consideration.
A copy of the bill can be found here.