Washington DC- Today, U.S. Senator Bob Casey (D-PA) released the following statement in response to a decision by the Internal Revenue Service (IRS) to bring a new pilot program to Pennsylvania in an effort to combat tax fraud. In January of this year, Casey wrote the IRS urging them to be more proactive in dealing with this increasing problem. Senator Casey has also weighed in with the Social Security Administration calling on the agency to limit access to the so-called ‘Death Master File’ to bolster privacy protections and crack down on tax fraud.
“Tax fraud is a challenging problem for law enforcement throughout the state. Bringing this IRS pilot program to Pennsylvania will give law enforcement more tools at their disposal to crackdown on tax fraud,” Casey said. “Earlier this year, I urged the IRS to do more to prevent tax fraud, and I’m pleased they’ve taken this step. I will continue to put pressure on the IRS, the Department of Justice and the Social Security Administration to work together to stop this growing problem.”
The IRS is expanding the law enforcement assistance pilot program designed to help law enforcement obtain tax return data vital to their local efforts in investigating and prosecuting specific cases of identity theft. The IRS launched the initial pilot in Florida in April of 2012. Over 750 waiver requests have been received through October from roughly 50 state and local law enforcement agencies in Florida participating in the pilot.
Under the pilot program, state and local law enforcement officials with evidence of identity theft involving fraudulently filed federal tax returns will be able to have identity theft victims complete a special IRS disclosure form. Taxpayers must give their permission for the IRS to provide law enforcement with the returns submitted using their Social Security number. Law enforcement officials will need to contact the identity theft victims in order to request and secure the victims' consent for disclosure of the records. In certain instances, the IRS will assist law enforcement in locating taxpayers and soliciting their consent.
In January, Casey urged the IRS to do more to combat this type of fraud. A full copy of his letter can be seen below:
The Honorable Douglas H. Shulman
Commissioner of Internal Revenue
Dear Mr. Shulman:
I write to share my serious concerns with the growth of identity theft in our tax system. According to a recent study by the Government Accountability Office, the Internal Revenue Service (IRS) identified almost 250,000 incidents of identity theft in 2010 alone. As you know, many of these incidents involve the fraudulent use of taxpayers’ social security numbers in order to steal their tax refunds. As a result, when a taxpayer files a legitimate return, they discover that their refund has already been paid out. These incidents of fraud result in the theft of millions of dollars of taxpayer money and create significant hardships for the families whose tax refunds have been stolen.
With more than 140 million individual income tax returns filed every year and limited resources for enforcement, I certainly understand the challenges the IRS faces in addressing this problem. However, our Nation’s fiscal difficulties make preventing this fraud even more important. I have been informed that one possible solution would involve comparing tax returns with information from taxpayers’ W-2s that are submitted by employers. This comparison would allow the IRS to identify discrepancies which could be the result of fraud. I urge the IRS to implement this type of system as soon as possible.
Identity theft is a growing problem in the United States and promises to pose a continued threat to our tax system if we do not take action. It is my hope that we can work together to prevent this kind of tax fraud, and provide assistance to Americans who have been victimized by these thefts.
Thank you for your consideration of this request.
Robert P. Casey, Jr.
United States Senator