Senate Finance Committee approves identity theft and fraud prevention measures

U.S. bill addresses identity theft and fraud prevention

The Senate Finance Committee today approved, by voice vote, a bill that addresses identity theft, fraud prevention, and related procedural matters.

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The legislation—“An original bill to prevent identity theft and tax refund fraud”—includes provisions that would:

  • Expand the IRS “identity protection personal identification number” (IP PIN) program to anyone requesting protection from identity theft-related tax fraud
  • Require more taxpayers and paid return preparers to file returns electronically 
  • Require the IRS to establish an internet platform for Form 1099 filings—for Form 1099-MISC by 2019, and for other Form 1099 returns by 2020
  • Require that electronically prepared paper returns include a “scannable code”
  • Increase the penalty for improper disclosure or use of information by preparers of returns 
  • Require the IRS to notify taxpayers of suspected identity theft and the outcome of related investigations

Read documents related to the bill on the Finance Committee website.

The bill approved by the Finance Committee does not include provisions that would provide authority to the IRS and Treasury Department to regulate all paid tax return preparers. The bill will now be referred to the full Senate for possible consideration. A date has not been set for the Senate to consider the bill.

Other legislation

The Senate Finance Committee suspended its consideration of another bill—the Taxpayer Protection Act—due to a lack of a quorum.  Senate Finance Committee Chairman Orrin Hatch (R-UT) indicated that the committee would finish its markup of this bill later.

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