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Will do-nothing Congress kill lawmakers call to fight $5b tax-ID fraud industry?

@MarcACaputo

Tax Day is no longer just a deadline for citizens to rush and file their returns.

It’s now a day for members of Congress — Democrats and Republicans alike —to file legislation or announce ways to prevent an estimated $5 billion in tax-identification fraud, which is particularly virulent in Florida and especially South Florida.

The effort by local lawmakers is nothing new, nor is the fact that the measures have died year-after-year in a do-nothing Congress.

On Monday, Miami-area Reps. Debbie Wasserman Schultz, Joe Garcia and Ileana Ros-Lehtinen all promoted legislation to put an end to the practice. Florida Sen. Bill Nelson announced a bill last week.

“Something needs to be done,” said Jon Simpkins, a Miami-Dade businessman who appeared with his wife, a tax-ID fraud victim, at Garcia’s press conference.

It took the Internal Revenue Service until April 8 to supply the family their tax-refund money from last year — a week before this year’s tax-filing deadline.

“I’m surprised they haven’t fixed this yet,” Simpkins said, detailing the delays and difficulties of just getting the IRS to do its job.


But the delay in fixing the growing problem isn’t just a window into the problems with the IRS. It’s an example of a broken Congress that struggles to accomplish the most-basic of tasks — including an issue members of all parties agree on: Stopping fraud.

Last year, for instance, Sen. Nelson’s crackdown bill stalled and died in the Senate because leadership said it didn’t want to deal with any new tax issues or tax reform — except for figuring out what to do with the then-expiring payroll tax cuts and the so-called Bush tax cuts.

So even though Nelson’s bill was more of a fraud-fighting proposal, it was considered tax legislation. And it was bottled up by the advent of the so-called “fiscal cliff” and budget-sequester negotiations. The bill could face another challenge this year: the banking-and-credit industry.

Nelson wants to make it tougher for thieves to get tax refunds on prepaid debit cards. The cards have become increasingly common ways for regular citizens to get their refunds credited to a bank account electronically. But, because the cards can be purchased by phone or internet and leave few fingerprints, scammers use them as well.

Tax ID fraud is simple and lucrative. Thieves purchase Social Security numbers and names of people on the black market. Then they download tax forms electronically, plug in the stolen information and file false returns. They request refunds be sent to prepaid cards or, less often, by check.

More here

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