Sen. Nelson calls for crackdown on tax ID thieves

Sen. Bill NelsonClarence (Bill) William NelsonThe most expensive congressional races of the last decade Lobbying world Bottom Line MORE (D-Fla.) wants Congress to crackdown on criminals who commit tax fraud. 

On Monday he unveiled a new version of the Identity Theft and Tax Fraud Prevention Act of 2015, which would increase the maximum penalty for tax-related identity theft from three years imprisonment and a $100,000 fine to 5 years imprisonment and a $250,000 fine.

New provisions of the bills include a requirement for the IRS to expand the existing PIN program to anyone requesting protection from tax-related identity theft; a requirement for the IRS to inform victims when their information is used in a tax fraud scheme and the criminal is charged with a crime; and requirement that healthcare providers phase out unnecessary storage of social security numbers.


The IRS would also be allowed accept truncated social security numbers of W2s, regulate paid tax-preparers, verify the identity of any individual opening an e-Services account and require tax return preparers to verify the identity of their clients.

Tax identity theft is on the rise.

The Federal Trade Commission said the 109,108 complaints it received last year accounted for 32.8 percent of all identity theft complaints, up from 30 percent in 2013, and last month, he Government Accountability Office also released a report that revealed the Internal Revenue Service had issued approximately $5.8 billion in fraudulent refunds in 2013.

With the filing deadline about a month away, the Senate Finance Committee is holding a full committee hearing Thursday to discuss how to protect taxpayers from schemes and scams.

Turbo Tax temporarily halted sending in state returns last month after the company and the government saw an influx in fraudulently filed returns.

Its parent company Intuit has been fighting allegations that it has been knowingly lettering thieves files false tax returns.