IRS’s identity theft liaison pilot program with law enforcement expands to 50 states

BY SALLY P. SCHREIBER, J.D.

The IRS announced the expansion of its Law Enforcement Assistance Program on identity theft to 50 states and the District of Columbia (IR-2013-34). The expansion was effective Friday. Under the program, state and local law enforcement officials with evidence of identity theft involving fraudulently filed tax returns obtain permission from the victims to disclose their tax return information.

The IRS will assist law enforcement in locating identity theft victims and obtaining their consent, which must be done on a special IRS disclosure form. Law enforcement representatives can then submit this consent to the IRS Criminal Investigation Division, along with a copy of the police report and the Form 14039, Identity Theft Affidavit, (a form victims file with the IRS) if one is available. Without the victims’ consent, Sec. 6103 generally prohibits the IRS from disclosing tax return information to law enforcement.

The program was rolled out last April as a pilot program, beginning in Florida, where the greatest number of identity theft cases occur (see Treasury Inspector General for Tax Administration Rep’t No. 2012-40-050). The program was expanded to eight more states in October (Alabama, California, Georgia, New Jersey, New York, Oklahoma, Pennsylvania, and Texas). According to Acting Commissioner Steven Miller, the IRS has been aggressively working on identity theft issues on multiple fronts. “The pilot expansion will help these efforts,” Miller said. Law enforcement interested in working with the IRS should contact a local IRS Criminal Investigation field office.

The IRS also touted its success in other identity theft areas, pointing to its stopping $20 billion in fraudulent refunds and 5 million suspicious returns in 2012, up from $14 billion and 3 million in 2011. It has resolved more than 200,000 identity theft cases since the beginning of 2013 and issued 770,000 identity protection personal identification numbers (IP PINs), a PIN it issues to help protect taxpayers who have had their identities stolen.

Since October, the IRS has pursued more than 670 criminal identity theft investigations and convicted offenders are receiving sentences averaging four and reaching up to 20 years. In January, the IRS participated in a coast-to-coast identity theft enforcement sweep that resulted in 298 indictments, informations, complaints, and arrests. 

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

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