WASHINGTON Taxpayers who are victims of identity theft should be allowed to see fraudulent tax returns attributed to them, tax attorneys told Congress in a proposal.
A wave of identity theft has led to tax fraud in Tampa, Florida, and Puerto Rico, among other places, shining a new light on the issue. Victims and local law enforcement are frustrated by tight restrictions on access to federal tax filings with the Internal Revenue Service.
In a letter dated Monday, attorneys with the American Bar Association's Tax Section asked top lawmakers on Congress's tax-writing committees to allow victims access to the bogus tax returns.
"If something is filed in your Social Security number, you should be able to see that," said Keith Fogg, a law professor at Villanova University and a co-author of the proposals.
The IRS stopped more than $14 billion in fraudulent refunds last year, including billions associated with scams from Puerto Rico, IRS spokesman Terry Lemons said.
The ID thefts related to taxes are typically one of two types - either someone seeking to profit from refund payments or else illegal immigrants motivated mainly by a desire to obtain a legal, albeit forged, identity.
In January, U.S. Immigration & Customs Enforcement announced the arrests of 50 people it accused of stealing thousands of Puerto Rican identities and selling them for up to $2,500 to illegal immigrants. It was ICE's largest such case ever.
Undocumented workers will steal a Social Security number to gain employment rather than to cash in on a tax refund, Fogg said.
In March, deputy IRS commissioner Steven Miller said the IRS was considering a pilot program in Tampa that would allow bogus tax documents to be shared with police.
Tampa has seen a rash of identity theft and tax refund fraud cases since last year, totaling $130 million in stolen funds. Wrongdoers steal Social Security numbers and file returns seeking tax refunds, using an abandoned home or phony address as a delivery point.
Democratic Senator Bill Nelson of Florida has introduced legislation to allow more taxpayer information sharing between the IRS and local law enforcement.