The growth of tax-related identity theft incidents is a trend that concerns all taxpayers and practitioners. At the end of fiscal 2012, the IRS had almost 650,000 identity theft cases in its inventory, according to the IRS National Taxpayer Advocate.
The problem has grown worse as thieves find creative ways to file tax returns using taxpayers’ names and SSNs, and obtain fraudulent refunds. When the real taxpayer files a return claiming the refund, that return is rejected. More than 75% of taxpayers filing returns are entitled to refunds; however, those whose identities are stolen will not likely receive a refund until the IRS determines the real identity of the taxpayer.
The AICPA shares members' concern about the impact of identity theft and offers the resources below to help members learn more about this issue and advise clients. We have testified before Congress and the IRS Oversight Board and offer recommendations on ways to further protect taxpayers, as well as preparers. (AICPA Asks for Changes in Senate Identity Theft Bill )
||What's Happening in Washington
In addition to monitoring federal efforts to combat identity theft, the AICPA advocates for ways to protect taxpayers, such as truncating Social Security numbers on information returns.
We support legislative proposals to establish a single point of contact at the IRS for theft victims the remediation process easier and also recommended to Congress further improvements to existing safeguards.
In the Fiscal 2014 budget,the President proposed a $5,000 civil penalty for each incidence of identity theft and restricted access to death records. Several bills have been introduced in Congress to help curb identity theft, including the Stop Identity Theft Act of 2013.