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Bramwell's Lunch Beat: House Oversight Chairman is a Tax Scam Victim

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Aug 31st 2015
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Stolen identity: Congressman Jason Chaffetz is victim of tax return scam
Rep. Jason Chaffetz (R-UT) tried to file his federal income tax return this year only to find out someone beat him to it. Like millions of Americans, the chairman of the House Oversight and Government Reform Committee was the victim of identity theft, wrote Dennis Romboy of the Deseret News. “I went to file an electronic return and somebody already posted under my name and my Social Security number,” he said. Chaffetz said he and his wife had to fill out another form and then deliver the return and the check to the IRS office in Ogden, Utah. “I just sent my tax return in the good, old-fashioned way,” he said. The scam is simple: Somebody steals your identity, files a bogus tax return in your name before you do, and collects a refund from the IRS. It's costing taxpayers billions of dollars each year. Chaffetz is using the incident to add fuel to his call for the firing of IRS Commissioner John Koskinen. “There has to be a better, smarter way to authenticate who somebody is,” Chaffetz said.

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Ayotte, IRS chief spar over agency's response to ID theft
During a Senate Budget Committee field hearing on tax-related identity theft in New Hampshire on Aug. 26, Sen. Kelly Ayotte (R-NH) pressed IRS Commissioner John Koskinen on a promise he made in May, wrote Dave Solomon of the New Hampshire Union Leader. At the time, Ayotte urged Koskinen to change the IRS rules so that victims of tax-related identity theft could readily obtain copies of the fraudulent returns, to assess the extent of damage to their privacy and decide what steps to take. “Since you agreed to do that, people across the country have been contacting my office on this issue. So when will this happen?” she asked Koskinen. “Taxpayers want to know how their information was used so they can take steps to protect themselves.” Koskinen said he had expected the change would be implemented in short order, but told Ayotte, “It's more complicated than I had hoped.” But he added that the process should be completed before the end of October. “I'm going to hold you to that,” Ayotte told Koskinen.

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Former IRS worker in Texas sentenced for fraud, ID theft
A former IRS employee in Texas has been sentenced to two years and a day in prison for stealing personal data to file more than 50 bogus tax returns, the Associated Press reported. Kenneth Goheen of Austin was sentenced on Aug. 26 and ordered to repay nearly $120,000 that he illegally received. He pleaded guilty in June to wire fraud and to aggravated identity theft. Goheen was a tax examining technician with the IRS before the scam was discovered. Prosecutors say he stole identification information from individual tax ID number applicants.

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Judge: IRS must say if White House sought taxpayers' information
A federal judge on Aug. 28 ordered the IRS to turn over the records of any requests from the White House seeking taxpayers' private information from the tax agency, wrote Stephen Dinan of the Washington Times. It's not clear that there were any such requests, but Judge Amy Berman Jackson said the IRS cannot just refuse to say so by citing taxpayer confidentiality laws, known as Section 6103 of the tax code. The judge's ruling is a victory for Cause of Action, a group that sued in 2013 to get a look at whatever requests the White House or other federal agencies had made. The IRS refused, saying even the existence of those requests would be protected by confidentiality laws and couldn't be released, so there was no reason to make the search. But the judge said on Friday that the agency couldn't use the privacy protection “to shield the very misconduct it was enacted to prohibit.” The IRS declined to comment because the matter is still pending in court.

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Recent California court ruling gives unmarried couples a big tax break
A recent major decision by the 9th Circuit Court of Appeals in California allowed two men who jointly owned two pricey homes, one in Beverly Hills and another in Rancho Mirage, each to deduct the interest on $1 million of mortgage debt plus $100,000 of home-equity debt on their individual tax returns, wrote Laura Saunders of the Wall Street Journal. The men, noted psychiatrist Charles Sophy and investor-relations executive Bruce Voss, were registered domestic partners during the period covered by the case but weren't married. As a result of the decision, the couple's debt limit for interest deductions on their two homes was $2.2 million, or twice the $1.1 million limit for married couples with two homes. The federal court's ruling overturned a Tax Court decision in favor of the IRS that limited the taxpayers to interest deductions on $1.1 million of debt.

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IRS technical guidance roundup (week of Aug. 17)
The IRS issued the following technical guidance last week:

Notice 2015-58 provides guidance on certain issues relating to the application of the Cooperative and Small Employer Charity Pension Flexibility Act, Pub. L. No. 113-97 (CSEC Act). The CSEC Act, which was enacted on April 7, 2014, specifies minimum funding requirements and related rules that apply with respect to certain defined benefit pension plans maintained by groups of cooperatives and related entities and groups of charities.

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