Senators hear tax fraud testimony - WFLA News Channel 8

Senators hear tax fraud testimony

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Senators at a hearing Wednesday heard testimony from a Tampa police detective and a Florida identity theft victim about the tax refund crime that is costing the country billions of dollars.

The hearing for the U.S. Senate Special Committee on Aging was called by Sen. Bill Nelson, who has filed legislation that would increase penalties for perpetrators and require the IRS to resolve ID theft cases faster.

Tampa has become a hotspot for the crime, in which fraudsters use stolen identities to file fake tax returns, often placing the refund money onto a debit card in someone else's name.

"Today's criminals looking for money, they don't need to stand on the corner looking for drugs, they don't need to use a crowbar, because the laptop has replaced the crowbar," Nelson said.

Tampa police detective Sal Augeri testified on Wednesday, pointing to new cooperation with IRS criminal investigations in Tampa Bay as progress in the fight against this crime.

Law enforcement, however, have long said the solution to the tax refund fraud crime is to prevent the fraudulent returns from getting through the system in the first place. The IRS has said it has put new filters in place to help catch fraud. No one from the IRS testified at the hearing.

For victims, identity theft cases can take a year or even longer in some cases to resolve after a taxpayer discovers their personal information has been used to file a fake return.  Nelson's legislation says there should be a plan of action to resolve and close the cases in 90 days. U.S. Rep. Kathy Castor (D-Tampa) has also filed legislation suggesting a 90-day window for resolution.

The legislation also seeks restrictions on the use of prepaid debit cards and limits on the number of refunds that can be directed to one account. It pushes the IRS to expand its "PIN" number program for identity theft victims and directs the Secretary of Commerce to restrict access to a list called the "Death Master File" that lists social security numbers of deceased individuals.

Another hearing on the tax fraud crime is scheduled for Monday with the Senate Committee on Finance.

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