A new bill passed by the House will work to prevent identity theft as well as help its victims. Titled “Stolen Identity Refund Fraud Prevention Act of 2016,” it was introduced by Rep. Jim Renacci (R-OH) and approved by the Ways and Means Committee in April, before its passing in the House in May. Next, the bill is headed for the Senate.
What the bill would change
The bill includes provisions to have the Treasury Department establish a central point of contact for victims of identity theft, as well as a requirement for the IRS to notify victims as soon as possible in the event of fraud and another requiring the agency to submit a study on the feasibility of a program that would allow victims to halt electronic returns in their name.
Another provision suggests an “Information Sharing and Analysis Center” to collect, analyze and share data that could help prevent future cases of identity theft. Renacci was inspired to introduce the bill after a personal brush with identity theft, according to a press release.
“This past tax season, someone used my stolen personal information and filed a fraudulent tax return in my name, claiming a refund,” he said. “I didn’t learn about this fraud until I received an IRS notice questioning a return I had filed – even though I had not yet filed.”
Renacci explained that he had heard stories similar to his, which is when he decided that it was time for the IRS and Congress to work together to offer taxpayers better protection against these incidents, citing the different hardships that come from them.
The IRS’s battle against ID theft
Among all the tax-related fraud cases out there, identity theft is still the top complaint that the IRS deals with, according to its annual “Dirty Dozen Tax Scams” list. Other scams on the list include phone scams, phishing and return preparer fraud
Because of its prevalence, the IRS has worked to improve its security measures against identity theft as part of its Security Summit initiative. According to the IRS, it’s been able to help convict around 2,000 identity thieves.
“Taxpayers have rights and should not be frightened into providing personal information or money to someone over the phone or in an email,” said IRS Commissioner John Koskinen in a release. “We urge taxpayers to help protect themselves from scams – old and new.”
One part of this initiative, “Taxes. Security Together.” is a campaign that aims to better educate consumers on how to avoid tax-related identity theft and other types of fraud. If it continues to pass, this bill could be the latest step of many taken by the agency to focus on taxpayer security.
In the meantime, though, ID theft protection is largely left in the hands of consumers. Though tax season is over, it’s important to secure your information year-round and prevent it from being used by fraudsters. To diminish your risk of tax fraud, file your return as soon as possible. Throughout the rest of the year, shred documents containing sensitive information and use safe practices online.
To keep a watchful eye on your information, you can invest in a service like Identity Guard, which can monitor your credit files and notify you of certain activity that may indicate fraud.