Virginia Sen. Mark Warner (D) wants American workers to get their billions of dollars back this filing season, not thieves.
After the Government Accountability Office (GAO) released a report Thursday revealing that the Internal Revenue Service had issued approximately $5.8 billion in fraudulent refunds in 2013, Warner sent a letter to IRS Commissioner John Koskinen asking whether the IRS could detect fraud by checking taxpayer refunds against employer-provided W-2 data.
Warner said data thieves only need a taxpayer’s name and social security number to pursue a fraudulent refund.
{mosads}“The IRS often uncovers an incident of identity theft before the victim does when a data thief files a fraudulent tax return using a stolen SSN,” he said. “Unfortunately, the agency has interpreted privacy laws as prohibiting the IRS from warning taxpayers that their SSN may have been stolen.”
Last session, Warner and Sen. Ron Johnson (R-Wis.) introduced legislation that would allow the IRS to alert taxpayers when they have been victims of identify theft. The bill never made it out of committee, but Warner said he’s hoping the IRS will be able to address this issue without congressional action.
In his letter, Warner asked whether the agency has considered steps to allow employers to increase the number of electronically filed W-2s and how delaying refunds or delaying the start of the filing season would affect the agency’s ability to identify fraud.
In its report the GAO recommended Congress accelerate W-2 deadlines to Jan. 31.
“If IRS had access to W-2 data earlier — through accelerated W-2 deadlines and increased electronic filing of W-2s —it could conduct pre-refund matching and identify discrepancies to prevent the issuance of billions in fraudulent refunds,” the report said.