Stopping Tax Offenders and Prosecuting Identity Theft Act of 2014

Floor Speech

I thank the gentleman for yielding.

Mr. Speaker, I rise today to urge my colleagues to support H.R. 744, the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2014 or, simply, the STOP Identity Theft Act.

Over the past several years, we have all witnessed the crime of tax return theft explode into a nationwide epidemic. It is time for Congress to act and let would-be thieves know that there will be serious consequences if they engage in this crime.

Thank you to Congressman Lamar Smith for leading this effort with me over the past 3 years. I hope that we can finally get this legislation over the finish line so law enforcement has more tools in the fight against crime. Working with our Senate sponsors, Senator Amy Klobuchar and Senator Jeff Sessions, I know that we can get this done.

Thank you to Chairman Goodlatte and to his intrepid staffer Caroline Lynch for your support and your leadership to help bring this bill to the floor today.

We have all heard stories of tax refund thefts. An unsuspecting taxpayer goes to file their tax return only to be told by the Internal Revenue Service that someone else has already filed their return and claimed their hard-earned tax refund.

Tax return identity theft wreaks emotional and financial havoc on hardworking taxpayers and costs the Federal Government billions of dollars.

According to a recent Treasury Department report, the number of stolen tax return refunds skyrocketed in just the last year--going from approximately 1.1 million stolen returns in 2011 to more than 1.8 million in 2012--a 69 percent increase. And the cost to the U.S. Treasury and the American taxpayers is staggering--nearly $9 billion in just the last 2 years and $21 billion in the last 5 years, Mr. Speaker.

We cannot allow billions of taxpayer dollars to be stolen from hardworking Americans and from our Treasury. This will only get worse unless we act.

We also must protect the thousands of taxpayers that fall victim to this crime, many of whom are vulnerable groups like seniors, veterans, and minors. Seniors in my south Florida community have been particularly hard-hit by this crime, and I simply couldn't stand by and let it continue.

Even though victims of tax return theft eventually are reimbursed by the U.S. Treasury, it can take many months and a lot of frustration to set things straight. Many of these victims rely on a timely tax return just to pay the bills.

These tax return identity thieves hide behind a veil of technology by stealing Social Security numbers and filing false electronic returns where the payoffs are almost instantaneous. Right now, more thieves and criminal organizations are turning to this lucrative crime because law enforcement lacks the kind of stiff criminal penalties afforded many other forms of identity theft. In this instance, technology has simply outstripped the enforcement tools currently on the books. The STOP Identity Theft Act brings together several measures to strengthen criminal penalties and increase the prosecution rate of tax return identity thieves.

First, this bill amends the identity theft statute to increase the maximum penalties for the crime of tax return identity theft. Right now, this crime is seen as low risk and high reward for would-be thieves. Toughening sentencing for tax return identity thieves will help deter this kind of crime.

The legislation also expands the definition of ``identity theft victim'' to include businesses and charitable organizations. Often, these organizations have their identities stolen and they are used in ``phishing'' schemes to extract the sensitive information from unsuspecting taxpayers used in tax return thefts. These thieves then use the harvested information to file thousands of fraudulent tax returns.

This amendment to the identity theft statutes will ensure that thieves who misappropriate the identities of any business, be it a small business or a nonprofit organization, can be prosecuted. The STOP Identity Theft Act also calls for better coordination between the Department of Justice and State and local law enforcement to make the most efficient use of the law and resources.

My own local law enforcement agencies in south Florida have been inundated with crime reports of tax return identity theft, and they need all the help we can provide.

This legislation is not the end-all, be-all to the congressional efforts to combat tax return identity theft, but it is a strong, bipartisan beginning. It is intended to provide targeted tools to law enforcement right away so that they are better prepared before next tax season rolls around.

Finally, the legislation also calls for DOJ to report back on trends in tax return identity theft, on progress in prosecuting these crimes, and recommendations for additional legal tools to combat it.

Information and data on trends about tax return identity theft can be valuable tools to detect and prevent future fraud, and it will inform Congress of additional legislative actions that will help in the effort.

I also send a big thank you to the various organizations that have supported and helped craft this legislation, including the National Conference of CPA Practitioners, the Committee for Efficient Government, the American Coalition for Taxpayer Rights, the Council for Citizens Against Government Waste, and the National Association of Counties.

Together, we all must ensure that Federal laws keep pace with emerging crimes such as tax return identity theft. It is time to make the prosecution of this crime a greater priority. The STOP Identity Theft Act is an important step towards this goal, and I urge my colleagues to support this legislation.

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