IRS doesn’t tell 1 million taxpayers that illegals stole their Social Security numbers
IRS doesn’t tell 1 million taxpayers that illegals stole
their Social Security numbers
By Stephen Dinan - The Washington Times - Tuesday, August
30, 2016
The IRS has discovered more than 1 million Americans
whose Social Security numbers were stolen by illegal immigrants, but officials
never bothered to tell the taxpayers themselves, the agency’s inspector general
said in a withering new report released Tuesday.
Investigators first alerted the IRS to the problem five
years ago, but it’s still not fixed, the inspector general said, and a pilot
program meant to test a solution was canceled, and fell woefully short anyway.
As a result most taxpayers don’t learn that their
identities have been stolen and their Social Security files may be screwed up.
“Taxpayers identified as victims of employment-related
identity theft are not notified,” the inspector general said.
Victims’ numbers are stolen by illegal immigrants who
need to give employers a valid Social Security number in order to get a job.
Employers are prohibited from probing too deeply into numbers, even when they
suspect fraud.
But the IRS learns of the scam when the illegal immigrants
file their taxes using a special Individual Taxpayer Identification Number
(ITIN) the agency doles out chiefly to illegal immigrants, as a way of making
sure they’re paying taxes even if they’re not supposed to be in the U.S.
Between 2011 and 2015, the agency flagged nearly 1.1
million returns where someone appeared to have stolen a valid Social Security
number, the inspector general said.
The IRS did not have any new comment on the findings,
instead referring reporters to an official response filed with the inspector
general, in which the agency insisted it’s making progress.
Karen Schiller, commissioner for the IRS’s small business
and self-employed division, said the 2014 pilot program was helpful, even if it
didn’t completely solve the notification problem, and said the agency will try
to alert all taxpayers beginning next year.
“As we continue to battle and make progress against all
strains of identity theft in the tax ecosystem, we recognized that we were
missing an important partner in this effort — the taxpaying public,” said Ms.
Schiller, who had the task of answering the inspector general.
She also vowed to figure out a system to let the Social
Security Administration (SSA) know if someone’s number has been stolen.
Under the 2014 pilot program, the IRS did notify some
25,000 taxpayers whose SSNs were pilfered. The notice they received told them
to contact credit monitoring agencies to try to head off any more damage to
their personal finances.
But the IRS said it’s prevented by federal law from
telling taxpayers who stole their identity.
The IRS says its role is not to enforce immigration laws
but rather to collect taxes. The agency issues ITINs to ensure that
unauthorized workers can still file tax returns, even if they aren’t supposed
to be working in the U.S.
Taxpayers who use an ITIN are eligible for some tax
credits, particularly for their children who are U.S. citizens.
Congressional Republicans have long complained to the IRS
that it is protecting illegal immigrants from discovery by allowing the use of
ITINs but failing to share the information with other agencies.
“All of us can agree that victims need to know that
they’re victims, and need to know that an agency of the federal government,
whether it’s IRS or whether it’s SSA or both, ought to have some ability to
talk to each other,” Sen. Dan Coats, Indiana Republican, said at a hearing
probing the issue earlier this year.
IRS Commissioner John Koskinen told Mr. Coats at the
hearing that in many of the cases friends or relatives lent their Social
Security numbers to the unauthorized workers, and already know their information
is being fraudulently used.
He also said the agency struggled to come up with a
solution that wouldn’t chase illegal immigrants away from filing their taxes
altogether.
“Obviously, priority for taxpayers and the IRS is
collecting those taxes,” he said.
Mr. Koskinen testified at the time that it may take new
legislation from Congress to let his agency inform taxpayers they’d been the
subject of identity theft.
But the hiccup in communicating with the Social Security
Administration seems like it should be easier to solve. The inspector general,
however, said the IRS didn’t have a system set up to make sure SSA always knew
of the fraud.
In some cases IRS employees said they sent a notice but
the Social Security Administration had no record of it. In other cases, it
appears the IRS didn’t even bother to make a notification.
“The lack of a formal process to ensure that the SSA is
notified of income not associated with an innocent taxpayer is problematic
because this notification is essential to ensure that victims’ Social Security
benefits are not affected,” the inspector general said.
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