Committee For Efficient Government’s Efforts In Combating Identity Theft-Based Tax Refund Fraud

Below are two form letters which CFEG has generated in its efforts to combat Identity Theft-Based Tax Refund Fraud.

Letter #1

Re: Identity Theft-Based Tax Refund Fraud

Dear Senator or Congressman:

The Government Accountability Office (GAO) recently prepared a report on November 29, 2012 titled, Identity Theft, Total Extent of Refund Fraud Using Stolen Identities is Unknown. This report found, among other things, that the IRS does not know the full extent of the occurrence of identity theft. While the IRS has made significant efforts to resolve, detect, and prevent identity theft-based fraud, the problem still exists and is continuing to grow.

According to the GAO’s report, as of September 30, 2012, the IRS had identified almost 642,000 incidents of identity theft that impacted tax administration in 2012, a significant increase over prior years. This figure did not include incidents related to the “Operation Mass Mail” scheme in which identity thieves used stolen identities of Puerto Rican citizens. The IRS reported that as of September 30, 2012 436,000 incidents occurred as a result of the scheme.

The GAO report acknowledged that the IRS has taken multiple steps to detect, resolve, and prevent identity-theft based tax refund fraud. For example, new filtering processes in 2012 were implemented which detect identity theft based on the characteristics of incoming tax returns. The IRS also uses the Identity Protection Personal Identification Number (IP PIN), sent to victims of identity theft. However, while these and other tools are necessary in the ongoing war on identity-theft based tax refund fraud, it is absolutely critical that the IRS commit and allocate most, if not all, existing and available resources now (including IRS personnel) to prevent identity theft-based tax refund fraud between the months of January, 2013 and April, 2013. This period represents the height of the 2013 tax season and most incidents of identity theft-based tax refund fraud will occur during this period of time.

On behalf of Committee For Efficient Government, LLC, we would request that your office send the form letter attached or a letter similarly worded requesting that the IRS commit and allocate most, if not all, existing and available resources now (including IRS personnel) to prevent identity theft-based tax refund fraud between the months of January, 2013 and April, 2013.

Sincerely,

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Letter #2

Senator or Congressman
Washington, DC 20510

Steven T. Miller
Commissioner of Internal Revenue
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20004

Re: Identity Theft-Based Tax Refund Fraud

Dear Mr. Miller:

The Government Accountability Office (GAO) recently prepared a report on November 29, 2012 titled, Identity Theft, Total Extent of Refund Fraud Using Stolen Identities is Unknown. This report found, among other things, that the IRS does not know the full extent of the occurrence of identity theft. While the IRS has made significant efforts to resolve, detect, and prevent identity theft-based fraud, the problem still exists and is continuing to grow.

According to the GAO’s report, as of September 30, 2012, the IRS had identified almost 642,000 incidents of identity theft that impacted tax administration in 2012, a significant increase over prior years. This figure did not include incidents related to the “Operation Mass Mail” scheme in which identity thieves used stolen identities of Puerto Rican citizens. The IRS reported that as of September 30, 2012 436,000 incidents occurred as a result of the scheme.

In the table below, tax-related identity theft incidents, identified by the IRS between 2008 and 2012, show that the problem is a large and growing one:

The GAO report acknowledged that the IRS has taken multiple steps to detect, resolve, and prevent identity-theft based tax refund fraud. For example, new filtering processes in 2012 were implemented which detect identity theft based on the characteristics of incoming tax returns. The IRS also uses the Identity Protection Personal Identification Number (IP PIN), sent to victims of identity theft. However, while these and other tools are necessary in the ongoing war on identity-theft based tax refund fraud, it is absolutely critical that the IRS commit and allocate most, if not all, existing and available resources now (including IRS personnel) to prevent identity theft-based tax refund fraud between the months of January, 2013 and April, 2013. This period represents the height of the 2013 tax season and most incidents of identity theft-based tax refund fraud will occur during this period of time. Please let me know what steps will be taken effective January, 2013.

Sincerely,

Senator or Congressman