INDIANAPOLIS — Senator Dan Coats, a member of the Senate Finance Committee, today issued the following statement regarding a new Internal Revenue Service policy to assist identity-theft victims in getting copies of bogus tax returns filed in their name:
“This announcement is good news for individuals who are victims of tax fraud. However, it fails to address another major IRS problem – employment-related identity theft. The IRS currently allows illegal immigrants to submit tax returns with W-2 earnings statements containing false Social Security numbers stolen from American citizens. Because the perpetrator used the stolen identity to get a job illegally rather than commit tax fraud, the IRS treats this as a routine tax return.
“This IRS policy can cause severe hardship for identity theft victims. The IRS may later accuse them of not reporting enough earnings on their tax returns, or they may lose income-related benefits as a result of false information that illegal immigrants submitted to the IRS.”