Senate panel to consider tax fraud bill

The Senate Finance Committee will consider a bipartisan measure aimed at curbing tax refund fraud next week, the panel announced on Friday.

The measure the committee will take up Wednesday, from Finance Chairman Orrin HatchOrrin Grant HatchTrump to award racing legend Roger Penske with Presidential Medal of Freedom Trump awards Presidential Medal of Freedom to economist, former Reagan adviser Arthur Laffer Second ex-Senate staffer charged in aiding doxxing of GOP senators MORE (R-Utah) and Sen. Ron WydenRonald (Ron) Lee WydenWyden blasts FEC Republicans for blocking probe into NRA over possible Russia donations Wyden calls for end to political ad targeting on Facebook, Google Ex-CIA chief worries campaigns falling short on cybersecurity MORE (D-Ore.), would make more than a dozen changes aimed at beefing up tax fraud efforts.

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Tax return fraud has exploded in recent years and is now one of the largest problems facing the IRS. The Government Accountability Office has estimated that identity thieves stole around $5.8 billion in refunds from unsuspecting taxpayers in 2013. 

Hatch and Wyden's bill would strengthen IRS requirements to inform taxpayers if their identity has been stolen, allow the agency to require at least truncated Social Security numbers on tax forms and increase criminal penalties for fraudulently stealing an identity. In all, the bill would raise around $286 million over a decade.

The measure serves to give the IRS more power to fight tax fraud, even as Republicans on Capitol Hill still believe that the agency targeted conservatives for their political beliefs and have worked to slash its budget.

For instance, the legislation explicitly gives the IRS the authority to regulate paid tax return preparers. A federal court struck down a program overseeing preparers last year, saying the agency had overreached in starting the initiative and needed congressional approval. At the time, several Republicans said they had no interest in giving the IRS more power over anyone.

"Since this threat will not end, Congress should take appropriate bipartisan action to implement needed legislative policies that will better protect taxpayers and shield taxpayer dollars from thieves," Hatch said in a statement.

“The wave of organized crime targeting taxpayers and their hard-earned money is seemingly relentless, and there’s a lot of work to be done making sure that our laws, agencies and taxpayers themselves are able to fight back," added Wyden, the Finance Committee's top Democrat.

The Finance action will come months after the IRS also acknowledged that hundreds of thousands of taxpayers could have had sensitive information compromised during a widespread breach of an agency system giving people access to previous returns.