Congress Probes Tax Prep Fraud and Identity Theft, June 28, 2012

Monday, February 4th, 2013 @ 7:40PM

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The House Judiciary Committee’s Crime Subcommittee held a hearing Thursday on the growing problem of identity theft and income tax preparation fraud.

“The number of these thefts has increased by approximately 300 percent every year since 2008,” said Judiciary Committee Chairman Lamar Smith, R-Texas. “The Internal Revenue Service detected almost 1 million fake returns among the 2010 returns alone. Tax thieves victimize innocent taxpayers in a number of ways. They often file fake returns under a false name or claim someone who is no longer alive as a dependent on their own forms. Often, the fraud is not detected until an individual files a legitimate tax return that is rejected by the IRS because a false return has already been filed and the refund paid. Tax return identity theft is a very real problem. Congress should do all it can to protect citizens from this crime.”

Smith is one of the original co-sponsors of H.R. 4362, the “Stop Identity Theft Act of 2012,” with Congresswoman Debbie Wasserman Schultz, D-Fla., a bipartisan bill that strengthens criminal penalties for tax return identity thieves. H.R. 4362 adds tax return fraud to the list of predicate offenses for aggravated identity theft and expands the definition of an “identity theft victim” to include businesses and charitable organizations. It also improves coordination between the Justice Department and state and local law enforcement in order to better protect groups that are most vulnerable to tax fraud so they are not future victims.

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