House passes bill to increase penalties for tax fraud-related identity theft

The Stopping Tax Offenders and Prosecuting Identity Theft Act (HR 4362), introduced in April by Judiciary Chairman Lamar Smith (R-Texas) and Rep. Debbie Wasserman Schultz (D-Fla.), strengthens criminal penalties, as well as expands the definition of an identity theft victim to include not only individuals, but also businesses and organizations that have had their identities stolen.

The bill would also add tax fraud to the list of offenses subject to two- to five-year mandatory sentencing guidelines.

HR 4362 directs the US Attorney General to make use of all existing resources of the Department of Justice, including task forces, to bring more perpetrators of tax return identity theft to justice and to take into account the need to concentrate efforts in areas of the country where the crime is most frequently reported, to coordinate with state and local authorities to prosecute and prevent such crime, and to protect vulnerable groups from becoming victims or otherwise being used in the offense.

Last year, more than 850,000 tax returns and $5.8 billion were associated with fraudulent tax refunds involving identity theft, according to a news release from Wasserman Schultz.

“Millions of Americans who file their taxes expect that they will receive a federal refund. Unfortunately, rather than collecting their hard-earned cash, many will discover that they have become victims of tax refund identity theft. Texans are especially vulnerable to these ID theft schemes. Texas ranks fifth in the nation for identity theft complaints. This bill increases penalties for tax return ID theft to help deter these crimes and better protect law-abiding, taxpaying Americans”, said Lamar in introducing the bill.

The bill has been referred to the Senate Judiciary Committee for consideration.

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