Senators Hassan, Grassley Introduce Bipartisan Bill to Help Stop $1 Billion in Tax Fraud and Identity Theft

WASHINGTON - U.S. Senators Maggie Hassan (D-NH) and Chuck Grassley (R-IA) introduced the bipartisan Preventing Tax Fraud and Identity Theft Act to better protect Americans from tax fraud and identity theft by more quickly giving the federal government the information that it needs to verify tax returns before fraudulent tax refunds are sent out. The legislation comes as a part of Senator Hassan's work to help combat scams and government waste, fraud, and abuse.

"Hardworking Americans shouldn't have to worry about bad actors stealing their identity and filing fraudulent tax returns in their name," said Senator Hassan. "This bipartisan legislation will help stop almost $1 billion in fraud by giving the IRS the same information that taxpayers already have, and better help protect people and our government from waste, fraud, and abuse."

"This commonsense legislation is a meaningful step toward strengthening protections for the taxpayer. By moving up the due date for certain third-party information returns, our bipartisan bill will improve tax compliance and help protect taxpayers from tax-related identity theft. I urge my colleagues to support this legislation to help the IRS prevent tax refund fraud," said Senator Grassley.

While taxpayers generally receive many tax forms by January 31, businesses often do not electronically submit the same information to the Internal Revenue Service (IRS) until March 31. This two-month gap can prevent the IRS from verifying information on tax returns before refunds are issued, giving criminals an opportunity to file fraudulent tax returns using stolen identities. The Preventing Tax Fraud and Identity Theft Act would close this loophole by requiring tax forms to be submitted to the IRS at the same time as they get sent to taxpayers - helping the agency stop an estimated $944 million in fraud over the next decade.

Specifically, the Preventing Tax Fraud and Identity Theft Act would:

· Accelerate the filing deadline for certain information returns from March 31 to January 31 so the IRS receives the same information as taxpayers do at the same time.

· Give the IRS the information it needs to verify tax returns before issuing refunds, helping prevent fraudulent tax refunds.

· Better protect taxpayers from identity theft by allowing the IRS to detect fraudulent returns earlier in the filing season.

· Cut waste, fraud, and abuse while helping to protect an estimated $944 million in taxpayer dollars over the next decade.

The proposal is supported by the IRS, the Treasury Inspector General for Tax Administration, and the Electronic Tax Administration Advisory Council.

Click here to view the text of the bill.

The Preventing Tax Fraud and Identity Theft Act builds on Senator Hassan's longstanding efforts to protect taxpayers, prevent waste and fraud, and help government work more effectively for the American people. Last month, she introduced the bipartisan ReportScams.gov Act to establish a centralized portal where Americans can report scams and get help. She also introduced the bipartisan No Aid for Ghost Students Act to prevent fraudsters from using stolen identities to steal federal student aid. As Ranking Member of the Joint Economic Committee, Senator Hassan is leading comprehensive investigations into combating scams, and as part of that, she led a Committee hearing earlier this year where she secured commitments from the FBI and Department of Justice to improve coordination and strengthen the federal response to scams.

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