President, IRS Want to Crack Down on ID Theft Related to Tax Returns

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With the tax filing deadline taking place next week, President Obama’s administration wants to reduce the increasing level of identity theft related to tax returns.

His 2014 budget plan has a proposed $5,000 civil penalty for tax-related identity theft, restrictions on accessing Social Security death records, and a requirement which would allow employers to omit employee Social Security numbers on W-2 wage statements, according to a news report.

The IRS has complained that access to taxpayers’ information taken from death records or employer payroll files “can create fraudulent tax returns and obtain refunds before the actual taxpayer is aware of the theft,” Bloomberg News reported.

The IRS’s identity-theft office received some 450,000 cases during the 2012 fiscal year, which is 78 percent over the number in fiscal 2011, the source said based on data from the National Taxpayer Advocate.

Obama’s plan also calls for increasing sentences for defendants convicted of tax-related identity theft, The Associated Press said.

The IRS claims during 2012 that it stopped some $20 billion in fraudulent returns. Part of that amount is related to ID theft.

Also, tax-related identity theft jumped more than 650 percent between 2008 and 2012, according to the IRS Taxpayer Advocate Service.

Despite the numbers, the 2013 LifeLock Tax Fraud Survey showed that only 24 percent of U.S. taxpayers selected ID theft as one of the “top two points of concern.”

“As a company that sees identity theft threats 24/7, we are concerned about the large disconnect between this growing threat and consumer education. This is really playing into the hands of identity thieves,” LifeLock President Hilary Schneider was quoted by TechZone360.

Also, the U.S. Senate Special Committee on Aging has investigated the number of identity thieves claiming other people's refunds, according to CPA Practice Advisor. New laws are possible.




Edited by Braden Becker
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