IRS changing policy on employment-related identity theft

The Internal Revenue Service will start notifying victims of employment-related identity theft in a shift of policy following criticism from Congress.

“We’re still working out the details of the policy change to advise people of possible misuse of their Social Security number, and we will have more details to share in the near future,” the IRS said in a statement.

{mosads}During a Senate Finance Committee hearing earlier this month, Sen. Dan Coats (R-Ind.) expressed concerns about the fact that the IRS doesn’t inform victims when illegal immigrants use their Social Security numbers to obtain employment and then file false information on their W-2 forms.

IRS Commissioner John Koskinen replied that the agency does not go after illegal immigrants who use other people’s Social Security numbers to get jobs and then file their tax returns using their own IRS-issued individual taxpayer identification numbers.

Koskinen said it’s in everyone’s best interest for undocumented workers to pay whatever taxes they owe.

The day after the hearing, the IRS informed Coats that the agency would start notifying new victims of employment-related ID theft as of January 2017, a spokesman for the senator said Tuesday.

The IRS did not say when the decision was made to change the policy, what information would be included in the notification and whether every victim would be informed, the spokesman added.

WTHR in Indianapolis first reported the shift. 

To ensure that the IRS addresses employment-related ID theft, Coats offered an amendment that was included in two taxpayer protection bills passed by the Finance Committee last week.

The amendment would codify that the IRS has to notify vicitims and would offer the victims identity-protection measures. Additionally, the provision would make sure that the IRS and the Social Security Administration are informing each other about cases where names and SSNs do not align.