Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Republican
Member Chuck Grassley (R-Iowa) are asking the Government Accountability Office
(GAO) to investigate the growing problem of tax fraud related to identity theft,
and how it contributes to the tax gap.
The Senators’ letter to David M. Walker, Comptroller General of the GAO,
is aimed at identifying what procedures the IRS currently follows to curb identity
theft and subsequent tax fraud, and how these measures can be improved.
Portions of the tax gap strategy crafted by the Treasury at Baucus’s request
include efforts to fight tax fraud. The Senators said on Tuesday that tackling
identity theft must be an integral part of the Department’s effort to
stop legally owed taxes from going unpaid.
“Like all Americans, the IRS needs to be aware of the dangerous consequences
of identity theft,” observed Baucus. “Innocent taxpayers who are victims
of identity theft should not be burdened with delayed refunds and red tape while
the IRS is sending fraudulent refunds to the thieves who have stolen their identities.
The IRS should be taking all possible precautions to ensure that it is not refunding
false tax claims. Federal dollars should be used to pay for priorities like
education and health care, not sent to identity thieves by the IRS.”
Grassley added: “Identity theft is a concern across the country. Tax
forms contain sensitive information, so taxpayers need to have confidence that
the IRS is part of the solution, not part of the problem, on identity theft.”