Lawmakers call for steps to reduce identity theft-related tax fraud

A group of legislators urged the IRS on Tuesday to take action to prevent identity theft-related tax fraud.

Rep. Richard Hanna (R-N.Y.) was among 36 members of Congress who signed a letter to IRS Commissioner John Koskinen requesting that prevention of identity theft and fraud be be among agency’s top priorities.

“Tax Day is an annual reminder that our tax code is much too costly and complicated for families and small businesses in upstate New York,” Hanna said. “So it is unacceptable that billions of dollars paid to the IRS by honest taxpayers are being sent back out to fraudsters and identity thieves.”

The U.S. Treasury Inspector General for Tax Administration found 1.5 million tax returns filed in 2011 were potentially fraudulent, leading to $5.2 billion in losses.

“Our government must do a better job protecting hard-working New Yorkers from such rampant fraud and abuse of our tax dollars,” Hanna said. “I expect the IRS to take this issue seriously and make significant improvements before tax day next year.”

Over the next five years, TIGTA estimates that tax fraud will lead to $21 billion in losses for the U.S. Treasury.

The legislators requested an update from Koskinen on what steps the IRS is taking to address weaknesses, what has recently been done to prevent identity theft-related tax fraud and what future action will be taken.