The Senate Finance Committee plans to markup Sept. 16 a bipartisan bill to thwart identity theft and tax refund fraud that would require the Internal Revenue Service to develop guidelines for ID theft refund fraud as well as require the IRS to prepare five biannual reports to Congress on ID refund fraud, the first of which would be required to be provided by Sept. 30, 2018.
“Protecting the private information of taxpayers at the Internal Revenue Service should be of highest importance to the agency and Congress,” said Senate Finance Committee Chairman Orrin Hatch, R-Utah, in a statement. “Unfortunately, as we learned this year, highly valuable information housed at the agency is susceptible to cybercriminals.”
With the markup, Hatch said that the committee “will take the first step to advance reforms that will enhance the controls used to access private taxpayer information at the IRS and improve the overall security of the refund process.”
Sen. Ron Wyden, D-Ore., ranking member on the committee, said the legislation “is a big first step toward cracking down on scam artists and cybercriminals who prey on taxpayers,” by ramping up “penalties for tax ID theft, help root out the bad actors who pose as law-abiding return preparers, and vastly improve the security of taxpayer information.”
The bill includes a number of provisions that were a part of Hatch and Wyden’s Tax Refund Theft Prevention Act of 2014, as well as additional measures from Committee members.
Under the bill, many small business taxpayers would be required to transition from paper information return filing for Forms W-2 and 1099 to electronic filing. The IRS would be required to establish a “simple and secure” Internet platform for small business taxpayers to prepare and file information returns.
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