U.S. Sen. Bill Nelson (D-FL) is pushing for passage of his bill to toughen criminal penalties for thieves who steal identities to file for fake federal income tax refunds in light of two reports that showed Thursday the government potentially paid $3.6 billion to the fraudsters in 2012.
The reports by the U.S. Treasury Department’s inspector general found that the Internal Revenue Service had managed to detect more fraudulent filings, using stolen identities, last year and the amount of potentially fraudulent refunds was down from $5.2 billion in 2011.
“While these reports show that some progress is being made in reducing tax fraud, it’s also clear that there is still much to be done,” Nelson said in a letter to the Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee.
The reports found, for example, that Miami was the top city where potentially fraudulent tax returns were filed in 2012 — 37,661 filings with $147 million in refunds issued. Staffers for the Inspector General said they didn’t have the number of potentially fraudulent filings in Broward and Palm Beach counties.
Nelson’s bill would also address what the Treasury’s inspector called “increased hardship” of ID theft victims who have to wait an average of 312 days for the IRS to close a case. Nelson’s legislation would require the IRS to send legitimate taxpayers the refunds they’re due within 90 days.
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