The House has approved legislation to increase the criminal penalties against identity thieves who steal taxpayer information to file fraudulent returns.
The Stopping Tax Offenders and Prosecuting Identity Theft Act, H.R. 4362, was introduced in April by Reps. Debbie Wasserman Schultz, D-Fla., and House Judiciary Committee Chairman Lamar Smith, R-Texas. The bill aims to address the problem of tax return identity theft by strengthening criminal penalties and increasing the prosecution rate of tax return identity thieves. The bill would add tax fraud to the list of offenses as a predicate for aggravated identity theft charges, subject to two- to five-year mandatory sentencing guidelines.
The STOP ID Theft Act also expands the definition of a victim of identity theft to include businesses and charitable organizations, as a growing concern among these groups is having their identities stolen and used in phishing schemes to extract the sensitive information from unsuspecting taxpayers used in tax return thefts.
The bill directs the Attorney General to make use of all existing resources of the Justice Department, including any appropriate task forces, to bring more perpetrators of tax return identity theft to justice. Under the bill, the Attorney General would take into account the need to concentrate efforts in those areas of the country where the crime is most frequently reported, coordinate with state and local authorities for the most efficient use of their laws and resources to prosecute and prevent the crime, and protect vulnerable groups, such as veterans, seniors and minors (especially foster children) from becoming victims or otherwise used in the offense.
According to the IRS, last year alone more than 850,000 tax returns and $5.8 billion were associated with fraudulent tax refunds involving identity theft. This is of particular concern for Floridians because the state has the most identity theft complaints in the country.
“We must do more to protect Americans from ever having to go through the headache of tax return identity theft,” Wasserman Schultz said in a statement after the bill passed on voice vote last Wednesday. “Chairman Smith and I have introduced this legislation to protect Americans and their tax dollars, while discouraging would-be thieves from perpetuating this crime."