H.R. 3832, Stolen Identity Refund Fraud Prevention Act of 2016, as amended

H.R. 3832

Stolen Identity Refund Fraud Prevention Act of 2016, as amended

Committee
Ways and Means

Date
May 16, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On Monday, May 16, 2016, the House will consider H.R. 3832, Stolen Identity Refund Fraud Prevention Act of 2016, as amended, under suspension of the rules. The bill was introduced on October 26, 2015, by Rep. James Renacci (R-OH) and was referred to the Committee on Ways and Means, and in addition to, the Committee on the Judiciary. The Ways and Means Committee ordered the bill reported, by voice vote, on April 28, 2016.

Bill Summary

H.R. 3832 directs the Internal Revenue Service (IRS) to enhance the agency’s efforts in combating the growing problem of identity theft. Specifically, the bill would require the IRS to maintain a central office for identity theft issues, to notify taxpayers of any instances of identity theft detected by the IRS, and to provide affected taxpayers with information on the circumstances of such theft. The bill also would require the IRS to report to the Congress on electronic tax filings including the feasibility of allowing taxpayers to opt-out of electronic tax filings and to provide biannual reports on identity theft and fraudulent tax refunds.

 

Background

Tax refund fraud associated with identity theft is a complex and rapidly changing threat facing the nation’s tax system. Identity theft refund fraud occurs when a refund-seeking identity thief obtains an individual’s identifying information and uses it to file a fraudulent tax return. Identity theft refund fraud burdens honest taxpayers who have had fraudulent tax returns filed in their name because they must deal with delayed refunds as they authenticate their identities with the IRS). In 2013, the IRS estimated that it prevented $24.2 billion in fraudulent identity theft refunds, but paid $5.8 billion in fraudulent IDT refunds.[1]

According to the bill sponsor, the bill “helps close the window of opportunity where individual data is often stolen, it offers better protection for victims, and it helps preserve the income of the federal Treasury from billions of dollars in losses.   This is a truly bipartisan effort crafted with notable recommendations from stakeholders.”[2]

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[1] See GAO Report, “Identity Theft and Tax Fraud: Enhanced Authentication Could Combat Refund Fraud, but IRS Lacks an Estimate of Costs, Benefits and Risks,” January 2015.
[2] See Rep. Jim Renacci Press Release, “Renacci, Lewis Introduce Bill to Protect Hard Working Taxpayers,” October 26, 2015.

Cost

The Congressional Budget Office (CBO) estimates enacting H.R 3832, as reported, would cost about $2 million annually or $10 million over the 2017-2021 period to notify taxpayers of instances of identity theft and to provide reports on this subject to the Congress; such spending would be subject to the availability of appropriated funds.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.