Treasury Inspector General for Tax Administration
April 9, 2008
Contact: David Barnes
The IRS needs to do more to combat the growing problem of employment-related and tax-fraud identity theft, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
TIGTA evaluated the effects of identity theft on taxpayers and tax administration. Individuals who steal taxpayer identities affect the tax system in two ways:
"The number of fraudulent tax returns filed as a result of identity theft increased 579 percent from 2002 to 2007," said TIGTA's Inspector General J. Russell George. "Further, the number of complaints resulting from employment-related identity theft more than doubled during the same time period."
"In 2007 alone, the Federal Trade Commission received 56,125 complaints of identity theft related to either the filing of a fraudulent tax return or the misuse of someone's identity to obtain employment," Inspector General George said. "Clearly, identity theft is a growing national problem that affects both taxpayers and tax administration."
TIGTA's report found that:
"The IRS has placed only limited emphasis on employment-related and tax fraud identity theft," George said. "The IRS's policy is that identity theft will only be investigated if it is committed in conjunction with other criminal offenses having a large tax impact."
In its response to TIGTA's draft audit, the IRS said it will update its strategies to make its efforts more efficient and effective. The full text of the IRS's response can be found beginning on p. 31 of the PDF file.
The Inspector General will discuss this report at a Senate Finance Committee hearing tomorrow (Thursday, April 10) at 10 a.m., Room 215, Dirksen Senate Office Building.
The full audit report can be found on TIGTA's website at www.treas.gov/tigta.
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