The IRS, of all government agencies, has to be the most hated. So with this new report coming out, it certainly makes it the #1 disliked.
The IRS has discovered more than 1 million Americans whose Social Security numbers were stolen by illegal immigrants, but officials never bothered to tell the taxpayers themselves, the agency’s inspector general said in a withering new report released Tuesday.
Investigators first alerted the IRS to the problem five years ago, but it’s still not fixed, the inspector general said, and a pilot program meant to test a solution was canceled — and fell woefully short anyway.
As a result, most taxpayers don’t learn that their identities have been stolen and their Social Security files may be screwed up.
“Taxpayers identified as victims of employment-related identity theft are not notified,” the inspector general said.
The report alarmed lawmakers on Capitol Hill, who were shocked that the IRS had gone for so long without fixing the issue.
“It is stunning that the IRS has chosen to aid and abet identity thieves for so long instead of protecting the innocent victims of the theft,” said Sen. Daniel Coats, Indiana Republican.
Victims’ numbers are stolen by illegal immigrants who need to give employers a valid Social Security number in order to get a job. Employers are prohibited from probing too deeply into numbers, even when they suspect fraud.
But the IRS learns of the scam when the illegal immigrants file their taxes using a special Individual Taxpayer Identification Number (ITIN) the agency doles out chiefly to illegal immigrants as a way of making sure they’re paying taxes even if they’re not supposed to be in the U.S.
Between 2011 and 2015 the agency flagged nearly 1.1 million returns where someone appeared to have stolen a valid Social Security number, the inspector general said.
The IRS did not have any new comment on the findings, instead referring reporters to an official response filed with the inspector general, in which the agency insisted it’s making progress.
Karen Schiller, commissioner for the IRS‘ small business and self-employed division, said the 2014 pilot program was helpful, even if it didn’t completely solve the notification problem, and said the agency will try to alert all taxpayers beginning next year.
“As we continue to battle and make progress against all strains of identity theft in the tax ecosystem, we recognized that we were missing an important partner in this effort — the taxpaying public,” said Ms. Schiller, who had the task of answering the inspector general.
She also vowed to figure out a system to let the Social Security Administration (SSA) know if someone’s number has been stolen.