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[Congressional Record Volume 158, Number 115 (Tuesday, July 31, 2012)]
[House]
[Pages H5510-H5514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

   STOPPING TAX OFFENDERS AND PROSECUTING IDENTITY THEFT ACT OF 2012

  Mr. SMITH of Texas. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 4362) to provide effective criminal prosecutions for 
certain identity thefts, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4362

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Stopping Tax Offenders and 
     Prosecuting Identity Theft Act of 2012'' or the ``STOP 
     Identity Theft Act of 2012''.

     SEC. 2. USE OF DEPARTMENT OF JUSTICE RESOURCES WITH REGARD TO 
                   TAX RETURN IDENTITY THEFT.

       (a) In General.--The Attorney General should make use of 
     all existing resources of the Department of Justice, 
     including any appropriate task forces, to bring more 
     perpetrators of tax return identity theft to justice.
       (b) Considerations To Be Taken Into Account.--In carrying 
     out this section, the Attorney General should take into 
     account the following:
       (1) The need to concentrate efforts in those areas of the 
     country where the crime is most frequently reported.
       (2) The need to coordinate with State and local authorities 
     for the most efficient use of their laws and resources to 
     prosecute and prevent the crime.
       (3) The need to protect vulnerable groups, such as 
     veterans, seniors, and minors (especially foster children) 
     from becoming victims or otherwise used in the offense.

     SEC. 3. VICTIMS OF IDENTITY THEFT MAY INCLUDE ORGANIZATIONS.

       Section 1028(d)(7) of title 18, United States Code, is 
     amended by striking ``specific individual'' and inserting 
     ``specific person''.

     SEC. 4. TAX FRAUD AS A PREDICATE FOR AGGRAVATED IDENTITY 
                   THEFT.

       Section 1028A(c) of title 18, United States Code, is 
     amended--
       (1) in paragraph (10), by striking ``or'';
       (2) in paragraph (11), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(12) section 7206 or 7207 of the Internal Revenue Code of 
     1986.''.

     SEC. 5. REPORTING REQUIREMENT.

       (a) Generally.--Beginning with the first report made more 
     than 9 months after the date of the enactment of this Act 
     under section 1116 of title 31, United States Code, the 
     Attorney General shall include in such report the information 
     described in subsection (b) of this section as to progress in 
     implementing this Act and the amendments made by this Act.
       (b) Contents.--The information referred to in subsection 
     (a) is as follows:
       (1) Information readily available to the Department of 
     Justice about trends in the incidence of tax return identity 
     theft.

[[Page H5511]]

       (2) The effectiveness of statutory tools, including those 
     provided by this Act, in aiding the Department of Justice in 
     the prosecution of tax return identity theft.
       (3) Recommendations on additional statutory tools that 
     would aid in removing barriers to effective prosecution of 
     tax return identity theft.
       (4) The status on implementing the recommendations of the 
     Department's March 2010 Audit Report 10-21 entitled ``The 
     Department of Justice's Efforts to Combat Identity Theft''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Smith) and the gentleman from Virginia (Mr. Scott) each will 
control 20 minutes.
  The Chair recognizes the gentleman from Texas.

                             General Leave

  Mr. SMITH of Texas. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous materials on H.R. 4362 currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  I am pleased to be an original cosponsor of H.R. 4362, the Stopping 
Tax Offenders and Prosecuting Identity Theft Act of 2012, with my good 
friend and colleague, the distinguished gentlewoman from Florida, 
Debbie Wasserman Schultz. This is a bipartisan bill that strengthens 
criminal penalties for tax return identity thieves.
  Tax fraud is a very real problem, and Congress should do all it can 
to protect citizens from this costly crime. Tax fraud through identity 
theft is a rapidly growing criminal enterprise in the United States. 
Criminals use stolen identities to steal income tax refunds from 
unsuspecting victims and from the Federal Government.
  With nothing more than stolen identity information--Social Security 
numbers and their corresponding names and birth dates--criminals have 
electronically filed thousands of false tax returns and have received 
hundreds of millions of dollars in wrongful refunds.
  The thieves deceive the Internal Revenue Service and file a return 
before the legitimate taxpayer files. The criminals then receive the 
refund, sometimes by check but often through a convenient but hard-to-
trace prepaid debit card. The criminals then wait for the mail to 
deliver the cards and checks at abandoned addresses. According to 
reports in the media, postal workers have been harassed, robbed, and, 
in one case, murdered as they have made their rounds with their mail 
truck full of debit cards and master keys to mailboxes.
  Tax thieves victimize innocent taxpayers in a number of ways. These 
thieves will file fake returns under a false name or claim someone who 
is no longer living as a dependent on their own forms. Often, the fraud 
is not detected until an individual files a tax return that is rejected 
by the IRS because someone else has already falsely filed and claimed 
their return.
  The IRS has detected 940,000 fake returns for 2010 alone, from which 
identity thieves would have received $6.5 billion in refunds. And those 
are just the ones they caught early. It is estimated by the IRS that 
they missed an additional 1.5 million returns with possibly fraudulent 
refunds worth more than $5.2 billion. The number of these cases has 
increased by approximately 300 percent every year since 2008.
  H.R. 4362 is a bipartisan bill that strengthens criminal penalties 
for tax return identity thieves. It adds tax return fraud to the list 
of predicate offenses for aggravated identity theft and expands the 
definition of an ``identity theft victim'' to include businesses and 
charitable organizations.
  H.R. 4362 also improves coordination between the Justice Department 
and State and local law enforcement officials in order to better 
protect groups that are most vulnerable to tax fraud from becoming 
future victims. The changes to Federal law proposed by H.R. 4362 are 
important to keep pace with this ever-increasing crime.
  Tax identity theft costs American families and taxpayers millions of 
dollars each year. It also results in confusion and needless worry, as 
taxpayers must work to correct the ID problem created by the false 
filers. It is critical that we take further steps to reduce the number 
of people who are victimized by this crime.
  Again, I want to thank Congresswoman Debbie Wasserman Schultz for her 
great work on this issue, and I urge my colleagues to join me in 
support of H.R. 4362.
  I reserve the balance of my time.

                              {time}  2020

  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume. I rise in opposition to H.R. 4362. It amends the Federal 
aggravated identity theft statute to add tax fraud to the list of 
predicate offenses. The penalty for aggravated identity theft is a 
mandatory term of imprisonment of 2 years or, for a terrorism offense, 
5 years. This bill would, therefore, subject more people to mandatory 
minimum sentences and, therefore, to all of the problems that have been 
repeatedly shown to be associated with mandatory minimum sentences.
  Fraud and identity theft are a serious and growing problem. But what 
we do to address the problems of fraud and identity theft should be 
measured and effective. While I appreciate the sentiments and efforts 
behind H.R. 4362, I cannot support an effort that seeks to stop one 
injustice by applying another. Because of the mandatory minimum 
sentences included in H.R. 4362, this bill is not an appropriate or 
effective solution to the problem of identity theft.
  I'm not saying someone who commits these crimes should not be 
sentenced to 2 or 5 years, or even more. But it is inappropriate and 
unjust for Congress to sentence an offender based solely on the name of 
the crime, years before any of the facts or circumstances of the case, 
or their role in the particular case and the character of the 
defendant, are known and taken into account.
  Mandatory minimum sentences have been studied extensively, and have 
been found to distort rational sentencing systems, to discriminate 
against minorities, to waste the taxpayers' money, and often to violate 
common sense. Even if everyone involved in the case, from the arresting 
officer, the prosecutor, the judge, and even the victim, after all of 
the facts and circumstances of the case are presented at trial by the 
prosecution and defense, if they all conclude that the mandatory 
minimum sentence would be an unjust sentence for a particular defendant 
in a particular case, it must still be imposed. Mandatory minimum 
sentences, based merely on the name of the crime, remove the sentencing 
discretion and rationality from the judge, and often require him to 
impose sentences that violate common sense. This is what brings about 
the result such as girlfriends who end up with much more time than 
their crack-dealing boyfriends, and often have to serve terms of 10-20 
years or more, teenagers having consensual sex with their girlfriends 
getting 10 years, or a recent case of Marissa Alexander in Florida, a 
mother of three and a graduate student, who was sentenced to a 
mandatory minimum of 20 years for discharging a gun to warn off an 
abusive husband during a dispute. A warning shot. Ironically, if she 
had intentionally shot and killed him under those circumstances, the 
maximum penalty for voluntary manslaughter in that State is 15 years. 
If you want to know how those mandatory minimums pass, just watch this 
bill.
  I offered an amendment at the committee markup of the bill which 
would have provided a maximum sentence of 4 years and 10 years instead 
of the 2 or 5, respectively. That way, offenders whose conduct 
warranted it could be sentenced to higher amounts of time, if it was 
appropriate, but for those whose conduct did not, such as bit players 
and those who play a minor role in a minor offense, the judge could 
arrive at a proper sentence. It is the height of legislative arrogance, 
in my view, for Congress to conclude that it has a better perspective 
to arrive at an appropriate sentence in advance, knowing nothing about 
the facts and circumstances of the case, than a judge charged with that 
responsibility who has heard all of the facts and circumstances of the 
case.
  In addition, Mr. Speaker, the Department of Justice has recently 
expressed

[[Page H5512]]

concerns with the bill which indicate that we should have had a 
legislative hearing on the bill to hear from stakeholders and those who 
have concerns about the legislation. Even though I support the intent 
of the sponsors to do more to address identity theft, for the reasons 
stated, the 2 and 5 year mandatory minimum sentences make this bill 
indefensible, and I cannot support it.
  I reserve the balance of my time.
  Mr. SMITH of Texas. Mr. Speaker, I continue to reserve the balance of 
my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield such time as she may 
consume to the gentlelady from Florida (Ms. Wasserman Schultz), the 
sponsor of the legislation.
  Ms. WASSERMAN SCHULTZ. Mr. Speaker, I rise today to urge my 
colleagues to support H.R. 4362, the Stopping Tax Offenders and 
Prosecuting Identity Theft Act of 2012, or simply the STOP Identity 
Theft Act.
  Many of you have seen the recent headlines calling attention to the 
escalating nationwide epidemic of tax return identity theft. An 
unsuspecting taxpayer goes to file their tax return only to be told by 
the Internal Revenue Service that someone else has already filed and 
claimed their hard-earned tax refund.
  This happened to one of my constituents, Joan Rubenstein, who was a 
64-year-old teacher. When her accountant filed her 2010 tax return in 
April of last year, he was told by the IRS that she had already filed. 
Joan followed advice and filed a police report and reached out to the 
IRS. But after 10 months, she still had not received her refund. Only 
after working with my district office were we able secure her refund, 
which she desperately needed to assist her daughter with her student 
loan payments.
  For her 2011 tax return, Joan was informed by the IRS taxpayer 
advocates office that she was okay to proceed with filing her return 
this year. Yet, shockingly, Joan's accountant filed only to learn that 
she was once again a victim of tax return identity theft for a second 
year in a row.
  No one should have to go through the trauma of having their hard-
earned tax refund stolen, and certainly not 2 years in a row. And Joan 
is not alone. This case, unfortunately, is not an anomaly. My office 
has been inundated with constituents who have also had their tax 
refunds stolen, and I know this is a rampant problem in Chairman 
Smith's district, and his home State of Texas as well. The amount of 
theft that goes on with this type of case is really astronomical.

  It's stories like Joan's that prompted me to file this legislation 
that is before us on the floor today. The crime of tax return identity 
theft has quickly emerged over the last few years, and Congress must 
act to quickly address this epidemic. Tax return identity theft wreaks 
emotional and financial havoc on hardworking taxpayers like Joan and 
costs the Federal Government billions of dollars.
  In 2011 alone, Mr. Speaker, the IRS reported that--listen to these 
numbers--851,602 tax returns and $5.8 billion were associated with 
fraudulent tax returns involving identity theft. That's a 280 percent 
increase since just 2010.
  These tax return identity thieves hide behind a veil of technology by 
stealing Social Security numbers and filing false electronic returns 
where the payoffs are almost instantaneous. Right now, more thieves and 
criminal organizations are turning to this lucrative, low-risk, high-
reward crime because law enforcement lacks the kind of stiff criminal 
penalties afforded many other forms of identity theft. Essentially, 
because of the small likelihood of getting caught, and the very minimal 
current penalty, it makes sense for these thieves to roll the dice 
because the chances of getting caught and actually doing any time at 
all is very low.
  In this instance, technology has simply outstripped the enforcement 
tools that are currently on the books. Basically, this crime is worth 
it for the criminals who are committing it, and we need to make sure 
that it is not worth it any more so they don't have incentive to 
continue and they move on to the next thing, and then we can go after 
them for that.
  We must protect the thousands of taxpayers like Joan who fall victim 
to this crime, many of whom belong to vulnerable groups like seniors, 
veterans, and even minors. The STOP Identity Theft Act brings together 
several measures to strengthen criminal penalties and increase the 
prosecution rate of tax return identity thieves.
  H.R. 4362 will add tax return fraud to the list of predicate offenses 
for aggravated identity theft. The aggravated identity theft statute 
was created in 2004 to fight identity theft crimes committed to 
facilitate other types of felonies. However, at the time, the problem 
of tax return identity theft was very new, and it wasn't included as 
part of the predicate offenses under aggravated identity theft.
  Today, it has become an urgent nationwide problem, and we must give 
law enforcement the additional tools needed to combat this crime. Each 
of the last two administrations have called for adding tax fraud to the 
predicate offenses under aggravated identity theft. With this change, 
the STOP Identity Theft Act will toughen sentencing for tax return 
identity thieves, which will help deter this kind of crime.
  Importantly, the legislation also expands the definition of an 
identity theft victim to include businesses and charitable 
organizations. Often these organizations have their identities stolen 
and used in phishing schemes to extract the sensitive information from 
unsuspecting taxpayers used in tax return thefts. Essentially what 
happens, and we've all been warned about this, you get an email from 
what you think is your bank or the charitable organization that you are 
used to giving donations to, but it's really not because these thieves 
have stolen that organization's identity, and they are asking for your 
personal information, and unsuspecting victims give them that 
information.

                              {time}  2030

  By the way, you should never do that because your bank and charitable 
organization won't ask you for personal information.
  These thieves then use the harvested information to file thousands of 
fraudulent tax returns. In fact, on the IRS Web site, it is noted that 
this type of phishing scheme is the most common one seen by the IRS. 
This amendment to the identity theft statutes will ensure that thieves 
who misappropriate the identities of any business, be it a small 
business or a nonprofit organization, can be prosecuted.
  The STOP Identity Theft Act also calls for better coordination 
between the Department of Justice and State and local law enforcement 
to make the most efficient use of the law and resources. My own local 
law enforcement agencies in south Florida have been flooded with crime 
reports of tax return identity theft, and they need all the help they 
can get.
  Finally, the legislation also calls for the Department of Justice to 
report back on trends, progress on prosecuting tax return identity 
theft, and recommendations for additional legal tools to combat it. 
Information and data about trends on tax return identity theft can be 
valuable tools to detect and prevent future fraud, and it will inform 
Congress of additional legislative actions that will help in the 
effort.
  This legislation is just the strong beginning of the congressional 
effort to combat tax return identity theft. I know this issue is deeply 
concerning to many of my colleagues, and I look forward to working with 
them in their efforts.
  This legislation is intended to provide targeted tools for law 
enforcement right away so that it is better prepared before next tax 
season rolls around and we have more victims who are really going to 
have months and months of problems and billions of dollars lost.
  I want to thank Chairman Smith for your support and your leadership 
on this issue. It really is a pleasure to work with you. And as to the 
various organizations that have supported and helped craft this 
legislation, in particular I would like to recognize the National 
Conference of CPA Practitioners and the American Coalition for 
Taxpayers Rights for their support and efforts with this bill.
  We must ensure that Federal laws are keeping pace with emerging 
crimes such as tax return identity theft. It is time to make 
prosecution of tax return identity theft a greater priority. The

[[Page H5513]]

STOP Identity Theft Act is an important step toward this goal, and I 
urge my colleagues to support this legislation.
  Once again, I thank Chairman Smith for working with me on this 
legislation.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield back the balance of my 
time.
  Mr. SMITH of Texas. I yield back the balance of my time.
  Mr. YOUNG of Florida. Mr. Speaker, I rise in support of H.R. 4362, 
the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2012.
  Tax-related identity theft is a wide-spread problem that must be 
addressed. The Internal Revenue Service (IRS) has reported that 641,052 
taxpayers were affected by identity theft last year, more than double 
the number from 2010. This year, all indications point to an even 
greater number of incidents of tax-related identity theft. In April, 
the IRS had already blocked more than $1.3 billion in potentially 
fraudulent tax refunds.
  While many taxpayers throughout the country have fallen victim to 
identity theft, the Tampa Bay area that I have the privilege to 
represent has unfortunately become a hotbed for this criminal activity. 
Local police have arrested street criminals with hundreds of Social 
Security Numbers, online tax preparation software, and prepaid debit 
cards containing tax refunds. Thieves are selling innocent people's 
identities for as little as $10 per Social Security Number.
  After these criminals have stolen an identity, they file a false tax 
return using the victim's name and information. The IRS will send the 
criminal a refund on a prepaid debit card that is virtually 
untraceable. The IRS says that these fraudulent refunds could cost the 
taxpayers $26 billion over the next five years.
  When the victim attempts to file his legal tax return, the IRS flags 
the account as having already received a refund and then begins an 
investigation to determine which return was actually filed by the valid 
taxpayer. Unfortunately, this process can take more than a year to 
complete and the victims are given no indication when they will receive 
their refund check. So now, not only has the victim's identity been 
stolen, the IRS will not give him the money that he or she is 
rightfully owed.
  H.R. 4362 is good legislation in that it calls on the Department of 
Justice to do more to prosecute tax-related identity theft and 
strengthens criminal penalties on the thieves. However, I believe there 
is much more that can be done to combat this growing problem.
  It is clear that the IRS needs to do a better job addressing this 
crime. There are steps that the IRS can and should take to prevent 
identity theft before it sends out fraudulent refunds. The IRS needs to 
do much better assisting the victims in getting their proper refunds. 
In May, the Treasury Inspector General for Tax Administration released 
a report titled, ``Most Taxpayers Whose Identities Have Been Stolen to 
Commit Refund Fraud Do Not Receive Quality Customer Service.'' More 
than 40 of my constituents have contacted me to express their personal 
experiences with tax-related identity theft and frustrations in getting 
the refunds they are owed from the IRS.
  In April, I wrote to IRS Commissioner Douglas Shulman, to call on him 
to address the growing problem of identity theft. I asked the 
Commissioner to respond to me about the actions the IRS has taken to 
combat fraud, how the IRS can better utilize its resources to deal with 
identity theft, how we can ensure that victims receive their proper 
refunds in a timely manner, and how the IRS can better collaborate with 
law enforcement to identify and prosecute identity thieves. Despite the 
public's increasing concerns regarding this important issue, it took 
the IRS until the end of June to respond to my original inquiry. I 
would like to insert into the Record my letter to Commissioner Shulman 
as well as the response from the IRS.
  The House Appropriations Committee, of which I am a senior member, 
has also indicated its strong concerns regarding the IRS's efforts to 
combat identity theft in the Fiscal Year 2013 Financial Services and 
General Government Appropriations bill. Section 103 of the legislation 
would require the IRS to ``institute policies and procedures that will 
safe-guard the confidentiality of taxpayer information and protect 
taxpayers against identity theft.'' Additionally, the Committee Report 
directs the IRS to report to the Congress regarding the number of cases 
of tax-related identity theft, the time it takes to resolve cases, and 
the agency's efforts to expedite resolution for these taxpayers.
  The Stopping Tax Offenders and Prosecuting Identity Theft Act is a 
good start for addressing tax-related identity theft. But it is only a 
start. As our national debt approaches $16 trillion, we cannot afford 
to send out billions in fraudulent refunds to criminals. At the same 
time, the victims of this crime should not have to wait more than a 
year to receive the money that is owed to them. There is much the IRS 
can do on its own to address these issues. However, if more legislative 
changes are needed, I stand ready to work with my colleagues in the 
House to combat this problem.

                                    Congress of the United States,

                                     House of Representatives,

                                   Washington, DC, April 12, 2012.
     Hon. Douglas H. Shulman,
     Commissioner, Internal Revenue Service, 1111 Constitution 
         Avenue NW, Washington, DC.
       Dear Commissioner Shulman: As the deadline for individuals 
     to file their tax returns approaches, I would like to take 
     this opportunity to call on the IRS to address the issue of 
     tax fraud by identity theft.
       As you arc well aware, this crime has been particularly 
     prevalent in the Tampa Bay region that I have the privilege 
     to represent. Several of my constituents have been victims of 
     identity theft and I thank you and your staff for your 
     efforts to help resolve their cases.
       Tax season is stressful enough without the threat of 
     identity theft. The taxpayers we work for should not have to 
     worry that their identity has been stolen while they are 
     complying with the law and simply filing their tax returns.
       Victims of identity theft can also experience significant 
     delays in receiving their refunds, depriving them of money 
     that many were counting on to help in these difficult 
     economic times. Often, these innocent citizens are left with 
     no idea of when they will be able to get the refund that is 
     rightly theirs.
       At a time when the federal government is again projected to 
     run a deficit of more than $1 trillion, we should not be 
     paying out fraudulent tax refunds to identity thieves. The 
     IRS should do everything in its power to prevent this crime 
     and quickly assist victims. If the IRS requires additional 
     statutory authority to take these steps, I would urge you to 
     work with the Congress to find appropriate solutions.
       To this end, I ask that you to respond to the following 
     questions:
       1. What actions has the IRS taken in this tax filing season 
     to address the growing number of tax-related identity theft 
     cases?
       2. How can the IRS better focus its resources to deal with 
     identity theft and assist victims?
       3. What steps has the IRS taken to ensure the timely 
     issuance of refunds to victims of identity theft?
       4. How can the IRS better work with federal, state, and 
     local law enforcement agencies to identify, investigate, and 
     prosecute identity thieves while protecting the privacy of 
     victims?
       Again, thank you for your work to help the victims of tax-
     related identity theft and your prompt reply to these 
     questions. With best wishes and personal regards, I am.
           Very truly yours,
                                                  C.W. Bill Young,
                                               Member of Congress.
                                  ____
                                  
                                       Department of the Treasury,

                                     Internal Revenue Service,

                                       Atlanta, GA, June 28, 2012.
     Hon. C.W. Bill Young,
     House of Representatives, Washington, DC.
       Dear Mr. Young: thank you for your letter of April 12, 
     2012, on our policy and processes for identity theft. We 
     appreciate your concern as this is an ongoing problem in the 
     country and continues to worsen. We understand and sympathize 
     with your constituents who have experienced identity theft 
     problems.
       Identity theft is a complex problem. The nature of the 
     problem is constantly changing, as identity thieves continue 
     to find new ways to steal personal information. Over the past 
     few years, we have seen a significant increase in refund 
     fraud schemes that involve identity theft. As a result, we 
     have developed a comprehensive identity theft strategy that 
     focuses on preventing, detecting, and resolving these cases.
       What actions has the IRS taken in this tax filing season to 
     address the growing number of tax-related identity theft 
     cases?
       We have taken a number of additional steps this tax filing 
     season to prevent identity theft and detect refund fraud 
     before it occurs. We designed new identity theft screening 
     filters that improved our ability to identify false returns 
     before we processed them and issued a refund. We also placed 
     more identity theft indicators on taxpayer accounts to track 
     and manage identity theft incidents.
       How can the IRS better focus its resources to deal with 
     identity theft and assist victims?
       We continue to assess our needs and resources, and, as a 
     result, we are currently undergoing training an additional 
     1,200 employees to assist with the processing of identity 
     theft cases. We will train these employees to assist identity 
     theft victims.
       What steps has the IRS taken to ensure the timely issuance 
     of refunds to victims of identity theft?
       In identity theft situations, our employees work to resolve 
     all the issues affecting both the taxpayer and the IRS. When 
     we receive a fraudulent tax return, we conduct an in-depth 
     review to identify the ``valid'' taxpayer, verify the amounts 
     claimed on the tax return, and complete all tax account 
     adjustments. Unfortunately, this process can be time 
     consuming.
       Once we verify the taxpayer is a victim of tax-related 
     identity theft, we place an identity theft indicator on his 
     or her account. This indicator triggers a review of any tax

[[Page H5514]]

     return submitted with the taxpayer's social security number 
     to confirm the validity of the return. We continue working to 
     correct the taxpayer's account until we complete the 
     correction.
       How can the IRS better work with federal, state, and local 
     law enforcement agencies to identify, investigate, and 
     prosecute identity thieves while protecting the privacy of 
     victims?
       Recently, we, with the Justice Department, announced the 
     results of a nationwide investigation of suspected identity 
     theft perpetrators. Working with the Justice Department's Tax 
     Division and local U.S. Attorneys' Offices, the nationwide 
     effort targeted 105 people in 23 states. This coast-to-coast 
     effort included indictments, arrests, and the execution of 
     search warrants involving the potential theft of thousands of 
     identities and taxpayer refunds. In all, the resulting 
     indictments included 939 criminal charges.
       Local law enforcement and other federal agencies play a 
     critical role in combating identity theft. Thus, an important 
     part of our effort to stop identity thieves involves 
     collaborating with law enforcement agencies. Although the 
     rules for protecting taxpayer privacy often make it difficult 
     for us to share information that local law enforcement might 
     find helpful, we are developing a procedure that would enable 
     us to share falsified returns with local law enforcement 
     after obtaining a privacy waiver from the innocent taxpayer. 
     Also, proposed legislation H.R. 3482 (the Tax Crimes and 
     Identity Theft Prevention Act) would expand section 6103 of 
     the U.S. tax code to allow limited disclosure of returns and 
     return information to law enforcement for the purpose of 
     combating tax crimes.
       We share your concerns about identity theft. We will 
     continue to review our processes to ensure that we are doing 
     everything possible to minimize the affect of identity theft 
     to taxpayers and help those who are victims of this crime.
       I hope this information is helpful. If you need further 
     assistance, please call me at (559) 454-6004 or Mr. James 
     Denning (Identification Number 1000160482) at (559) 454-6691 
     if we can assist you further.
           Sincerely,
                                           Rosalind C. Kochmanski,
                              Field Director, Accounts Management.

  The SPEAKER pro tempore (Mr. Meehan). The question is on the motion 
offered by the gentleman from Texas (Mr. Smith) that the House suspend 
the rules and pass the bill, H.R. 4362.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. SMITH of Texas. Mr. Speaker, I object to the vote on the ground 
that a quorum is not present and make the point of order that a quorum 
is not present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.
  The point of no quorum is considered withdrawn.

                          ____________________
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