U.S. Rep. Mike Bishop (R-MI) on March 21 introduced a bill to modernize technology and internal processes at the Internal Revenue Service (IRS) so American taxpayers are better protected from identity theft and fraud.
“Americans deserve an IRS that is operating with up-to-date IT infrastructure to proactively combat identity theft, tax refund fraud, readily assist taxpayers when they are targeted and be held accountable when they fail,” said Rep. Bishop about the agency’s technology, which reportedly dates back to the early 1960s, according to his office.
If enacted, the Taxpayer ID Protection and Fraud Prevention Act, H.R. 5368, would amend the Internal Revenue Code of 1986 and require that electronic funds transfers be made to taxpayers who electronically filed their income tax returns, according to a draft of the bill provided by Rep. Bishop’s office. This provision would enhance security and allow taxpayers to receive faster refunds, while also establishing a digital history of payments that could be used by law enforcement agencies investigating fraud, according to the congressman’s staff.
“This is an issue that really hits home for me because I have seen first-hand the devastation identity theft can cause a family or a small-business owner,” said Rep. Bishop, who was joined by original cosponsors U.S. Reps. Jackie Walorski (R-IN) and James Renacci (R-OH) in introducing H.R. 5368.
For Americans who can’t electronically file tax returns, the proposed electronic refunds provision could be waived under H.R. 5368, according to the bill’s draft. This would be acceptable for people who don’t have access to methods by which the U.S. Secretary of the Treasury makes payments by electronic funds transfer, “including bank accounts, prepaid debit cards, Direct Express Cards, digital wallets, and any other secured electronic payment method as may identified by the Secretary,” according to the draft.
Among several other provisions, H.R. 5368 would require the IRS to track subcategories of improper payments; to proactively verify taxpayer identities before issuing tax refunds; and to organize a “successful public-private partnership” that included the IRS, technology industry, states and certified tax preparers to focus on monitoring and resolving cyber threats in real-time, according to a summary from Rep. Bishop’s office.
H.R. 5368 has been referred for consideration to the U.S. House Ways and Means Committee.