The Senate Finance Committee on Wednesday, April 20, approved two bills that would require the IRS to increase security measures and enforce new policies, but rejected a provision to regulate tax return preparers.
The so-called Prevent Identity Theft and Tax Refund Fraud Act would reinstate the Internal Revenue Service's streamlined critical pay authority, which allows the agency to hire cybersecurity employees at a higher pay grade and on expedited timetables. IRS Commissioner John Koskinen has said this is one of his top requests of lawmakers.
Among other things, the Act would also:
- Expand the identity protection personal identification number (IP-PIN) system to all taxpayers.
- Make it a felony for a person to use a stolen identity to file a return or other document.
- Increase reporting from the IRS to oversight groups about ID theft.
- Require the IRS to notify a taxpayer when someone else has filed a return using his or her Social Security number. The same amendment was also added to the taxpayer protection bill.
A complete description of the Act prepared by the congressional Joint Committee on Taxation and published as JCX-27-16 is available here .
A companion bill, the Taxpayer Protection Act of 2016, was approved by the Committee the same day. This act would:
- Require the Treasury Inspector General for Tax Administration to perform an audit of the criteria the IRS uses to select tax returns for audit, assessments, criminal investigation or heightened scrutiny or review. (Yes, this relates to the 501(c)(4) fiasco
- Require the he IRS to create a process whereby a sole point of contact (which may include a team or subset of specially-trained employees who can work across functions to resolve problems for the victim and who are accountable for handling the case to completion) at the IRS would help victims of tax-related identity theft recover their stolen or unfairly suspended tax refund, coordinating with various IRS functions on their case.
A complete description of the Act prepared by the congressional Joint Committee on Taxation and published as JCX-33-16 is available here . #taxpolicy #RighttoPractice #Tax