South and west-central Florida has been hit by a large tax fund refund scheme in which individuals used Social Security numbers and names to steal the identities and tax refunds of taxpayers. Some accused of stealing taxpayer identities allegedly purchased luxury automobiles and expensive jewelry.
To combat the identity theft and tax fraud, Sen. Bill Nelson (D-Fla.) pressured the IRS to launch a pilot program, under which law enforcement can ask victims to fill out an IRS disclosure form in suspected cases of identity theft-related tax fraud. The disclosure would allow the IRS to share potentially fraudulent returns with state and local law enforcement.
The IRS said Nelson’s program has been “an effective way for law enforcement to work with the IRS to pursue identity thieves and protect taxpayers.”
Nelson has also sponsored legislation that would increase the penalties for individuals caught filing fraudulent tax returns, and that bill is set to be filed next week. The legislation would also direct the U.S. Treasury Secretary to reduce the time it takes to resolve identity theft cases from 196 days to 90 days, establish a numbering system for prepaid cards that allows the IRS to see when it is issuing a refund to a prepaid card and exercise greater care to prevent fraud and requires the IRS to develop a plan of action for a real-time tax system that more effectively matches information.