Identity Theft and Tax Fraud Prevention Act of 2013

Friday, June 28th, 2013 @ 2:18AM

Senate Bill 676 – Identity Theft and Tax Fraud Prevention Act of 2013

This bill was introduced in the United States Senate on April 9, 2013. It is sponsored by Senator Bill Nelson [D – FL].

The bill requires the Secretary of the Treasury to:

(1.) establish a plan to reduce the administrative time required to process and resolve cases of tax-related identity theft;

(2.) ensure that taxpayers who have been adversely affected by identity theft have a single point of contact at the Internal Revenue Service (IRS);

(3.) issue a personal identification number to identity theft victims after their true identity has been established and verified;

(4.) implement a program to prevent the processing of a tax return by an identity thief;

(5.) issue regulations that restrict the delivery or deposit of multiple tax refunds to the same individual in the same tax year; and

(6.) submit a report on options for creating a tax system that reduces burdens on taxpayers and decreases tax fraud through information matching.

The bill imposes restrictions on the use of prepaid debit cards for tax refunds.

The bill prohibits the Secretary of Commerce from disclosing information contained on the Death Master File relating to a deceased individual to persons who are not certified to access such information.

The bill directs the Secretary of Health and Human Services (HHS) to:

(1.) establish and implement procedures to eliminate the unnecessary collection, use, and display of social security account numbers of Medicare beneficiaries;

(2.) ensure that newly-issued Medicare identification cards meet certain security standards; and

(3.) establish a pilot program to evaluate the applicability of smart card technology to Medicare beneficiaries or providers and whether such cards would be effective in preventing Medicare fraud.

The bill amends the federal criminal code to prohibit the display, sale, or purchase of social security numbers without the consent of the account holder.

The bill imposes criminal penalties for obtaining a social security number for purposes of locating or identifying an individual with the intent to physically injure, harm, or use the identity of an individual for any illegal purpose.

The bill allows civil remedies to enjoin and recover losses from violations of this Act and sets forth civil penalties for such violations.

The bill amends the Internal Revenue Code to:

(1.) impose a criminal penalty for willful misappropriation of another person’s taxpayer identity; and

(2.) increase the civil and criminal penalties for unauthorized disclosure of taxpayer information by paid tax return preparers.

The bill authorizes the IRS Commissioner to transfer appropriated funds to be used solely to prevent and resolve potential cases of tax fraud.

The bill directs the Commissioner to establish in the Criminal Investigation Division of the IRS the position of Local Law Enforcement Liaison to coordinate the investigation of tax fraud with state and local law enforcement agencies.

And, the bill grants the Secretary of the Treasury access to information in the National Directory of New Hires for purposes of administering the tax code.

Senate bill 676 is a comprehensive piece of proposed legislation designed to combat and prevent identity theft-based tax refund fraud. CFEG will continue to monitor this bill and report on its status as it makes its way through committee and the 113th Congress.

View Senate Bill 676 (PDF)

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Categories: Senate bills

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