By Frank Byrt
As part of its growing efforts to stanch identity theft crime, the IRS announced the nationwide expansion of its program designed to help state and local law enforcement agencies obtain tax return data needed for their local efforts in investigating and prosecuting the thieves. Beginning March 29, the program will cover the entire nation.
After an initial pilot program launch in Florida in April 2012, the IRS expanded the program to eight additional states, focusing on those with the highest percentage of identity theft tax refund fraud. Those states included Alabama, California, Georgia, New Jersey, New York, Oklahoma, Pennsylvania, and Texas.
The expanded program resulted in more than 1,560 waiver requests from theft victims, giving state and local law enforcement consent to access their fraudulently filed tax returns. Such action requires a special IRS disclosure form to be signed by the identity theft victim, as federal law imposes restrictions on the sharing of taxpayer information, including information that can be shared with state and local law enforcement.
The IRS said it will assist law enforcement agencies in locating taxpayers and soliciting their consent. Law enforcement representatives must submit a disclosure authorization form to the Criminal Investigation Division of the IRS, along with a copy of the police report and IRS Form 14039, Identity Theft Affidavit
The IRS will then process the disclosure and forward the documentation to the law enforcement officer who requested the documents. The documents will not be sent directly to the taxpayer; however, the IRS will continue to work directly with taxpayers to resolve their tax accounts as quickly as possible.
"The results of the pilot illustrate that this works as an innovative tool for law enforcement to help pursue tough identity theft situations," said IRS Acting Commissioner Steven T. Miller in a press release. "This program is an effective way for law enforcement to work with the IRS to pursue identity thieves and protect taxpayers. Expanding the program and making it permanent on a nationwide basis makes sense for victims as well as law enforcement and tax administration."
"The IRS continues to aggressively work identity theft issues on multiple fronts, focusing on helping victims of this terrible crime and pursuing the perpetrators across the nation," Miller said. "The pilot expansion will help these efforts."
The IRS also said it has resolved a significant number of identity theft cases because of its continued emphasis on criminal investigations. "Since the start of 2013, the IRS has worked with victims to resolve and close more than 200,000 cases. This is in addition to the expanded Identity Protection PIN (IP PIN) pilot, an initiative to protect victims with previously confirmed cases of identity theft by creating an additional layer of security on these accounts."
The IRS has issued more than 770,000 IP PINs to identity theft victims this tax filing season.
Since October, there have been more than 670 criminal identity theft investigations opened by the IRS.
Those convicted of identity theft are getting prison sentences that average four years, with some as long as twenty years.
In fiscal 2012, the IRS prevented the issuance of more than $20 billion in fraudulent refunds, up from $14 billion the year before. IRS efforts stopped five million suspicious returns in 2012, up from three million returns in 2011.