President Barack Obama’s 2014 budget plan will include proposals to combat a rise in identity theft occurring through tax returns, said an administration official.
Obama’s budget, which will be released tomorrow, will call for imposing a $5,000 civil penalty for tax-related identity theft, restricting access to Social Security death records and allowing employers to avoid putting Social Security numbers on W-2 wage reporting forms. The official spoke on condition of anonymity in advance of the budget’s release.
The Internal Revenue Service has been trying for several years to prevent and prosecute tax-refund fraud. Criminals with access to taxpayers’ identifying information -- sometimes from death records or employer payroll files -- can create fraudulent tax returns and obtain refunds before the actual taxpayer is aware of the theft.
For fiscal year 2012, the IRS’s identity-theft unit received about 450,000 cases, up 78 percent over the previous year, according to the National Taxpayer Advocate, an independent organization within the agency.
The proposal was reported earlier by the Associated Press.