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WASHINGTON, D.C. — Pennsylvanians accounted for nearly one of every 10 victims of identity theft in the United States in 2014, and U.S. Sen. Robert Casey is pushing for new measures to combat the crime.
Noting at a news conference on Thursday that Pennsylvania was second only to Florida in identity theft last year, Casey, D-Scranton, said Congress needs to act on the Identity Theft and Tax Fraud Prevention Act of 2015, which was referred to the Senate Finance Committee back in March.
Senate Bill 676, of which Casey is a co-sponsor, would phase out unnecessary use of Social Security numbers in the healthcare system, expedite refunds for victims, reform “a maze of bureaucracy” that has left victims frustrated, and increase penalties on those who commit tax fraud, including tax preparers who are engaged in fraud, Casey said.
Casey said there were 172,426 identity theft cases reported in Pennsylvania last year, and 2,302 of those victims were from the Scranton/Wilkes-Barre/Hazleton Metropolitan Statistical Area. In our area, that’s about one in every 245.
“In recent years, identity theft has become an increasing problem. With more transactions occurring online, it has become easier for bad actors to gain access to Americans’ personal information and use that information to commit tax fraud,” Casey said.
“ID theft impacts far too many Pennsylvanians, and it’s critical that Congress take action to better combat ID theft and protect victims,” he said.
In addition to reporting ID theft to local and state law enforcement, Casey said many Pennsylvanians have made complaints to the Federal Trade Commission about identity theft — 10,446, complaints in 2014, to be exact. Government documents/benefits fraud accounted for 3,613, or 35 percent, of these cases.
And identity theft is a growing problem. ID theft reports increased nearly 17 percent last year, Casey said.
Bill provisions
Casey said the bill would both help prevent ID theft, as well as improve the IRS’s response to ID-theft-related tax fraud. Specifically, it would:
• provide for expedited refunds for victims of identity theft — no more than 90 days on average after the theft is confirmed;
• ensure that all victims have a single point of contact at the IRS that tracks the case from start to finish;
• require that the IRS inform victims when their information is used in tax fraud;
• establish a law enforcement liaison within the Criminal Investigative Division of the IRS to work with state and local law enforcement;
• phase out the unnecessary storage and use of Social Security Numbers in the health care system;
• expand IRS access to the National Directory of New Hires to expedite information sharing;
• increase penalties for engaging in tax fraud; and
• increase the penalty for tax preparers who improperly disclose or use tax return information.
Casey said phasing out the use of Social Security numbers in health care records would be “among the more difficult parts” of the new policy, especially given that Medicare recipients’ Social Security numbers are basically their only medical insurance account numbers.
A provision in the bill also calls for implementing a pilot program for the use of “smart cards” for Medicare recipients that would not display personal information such as a Social Security number or birth date on the face of a card.
Penalties against tax preparers who disclose personal information would be increased from $250 per occurrence to $1,000, and capped at $50,000 instead of $10,000, and the cap on a fine upon conviction for a misdemeanor would increase from $1,000 to $100,000.
The costs
While the bill authorizes the IRS to spend up to $10 million of its annual budget for “preventing, detecting, and resolving potential cases of tax fraud,” Casey said he wasn’t aware if there was any cost estimate for implementation of other provisions in the act. But he believes “it’s a problem we can deal with for a relatively low cost.”
Casey noted that the bill has nine co-sponsors including himself, and they are all Democrats.
“I can’t understand why we can’t get Republican help on this. They’ve been complaining about the IRS for years. You’d think they would want to sign on to this bill,” Casey said.