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Clamp Down on Identity Theft

IRS to Clamp Down on Identity Theft

The proposed budget for the Internal Revenue Service in 2014 will include new steps to the problem that the agency has identified as its top scam – identity theft.

According to the Obama Administration, the new steps will include increasing criminal sentences for those convicted of tax-related identity theft and creating new civil penalties for those who file fraudulent returns.  The IRS would be able to assess a $5,000 civil penalty for each incidence of identity theft.

The government would also limit access to Social Security Administration files on deceased individuals that have been used by those seeking fraudulent refunds. Instead, the files that the SSA compiles would be available immediately only to those who legitimately need the information for fraud prevention purposes. All other users would have to wait three years for access.

The proposal would also revise the W-2 form that employers must provide the IRS so that it includes an “identifying number” for each employee rather than the employee’s Social Security number.

As of the end of 2012 the IRS had more than 3,000 employees working on identity theft issues, more than double from the previous year.

The agency says that in 2012 it prevented $20 billion in fraudulent returns, including those related to identity theft, compared to $14 billion the previous year. It says that it stopped 5 million suspicious returns in 2012, up from 3 million in 2011.

 

by Industry Writer, Dave McClure

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