IRS Could Prevent Theft by Cross Checking Information on Tax Returns with W-2s
WASHINGTON, DC –U.S. Senator Bob Casey (D-PA) has sent a letter to the IRS urging the agency to tackle one of the most common forms of tax fraud to protect taxpayers from criminals seeking to steal refunds.
In 2010 alone there were over 250,000 incidents of tax-related identity theft, many of which involved the fraudulent use of a taxpayers’ social security number to steal their tax refund. By making sure the information on tax returns matches the information on a taxpayer’s W-2, the IRS can identify discrepancies before refunds are sent to criminals seeking to defraud taxpayers.
“Honest taxpayers waiting on refund checks should not face the hardship of having their identity and hard-earned money stolen, especially when the IRS can take steps to prevent this crime,” said Senator Casey. “The IRS should make every effort possible to implement this system of verification and protect Pennsylvania taxpayers.”
Identity theft is a growing problem in the United States and promises to pose a continued threat to the tax system if action is not taken. 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.
The full text of Senator Casey’s letter to IRS commissioner Douglas Shulman is 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.
Sincerely,
Robert P. Casey, Jr.
United States Senator
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