I thank the Chairmen for holding this hearing. I am pleased to have the Internal Revenue Service and the Social Security Administration before us today. These agencies are both entrusted with personal information, and they should play an important role in preventing identity theft.
Tax fraud and identity theft are growing problems for tax administration. They harm the Federal treasury, American citizens, and their families. I commend the Internal Revenue Service for identifying and preventing over $14 billion in fraudulent tax refunds last year. I also thank the agency for its assistance to almost 500,000 taxpayers who have been victims of identity theft. Despite this progress, we need to do more, and we must do more, to help victims and stop the loss of billions of taxpayer dollars.
I continue to have serious concerns about the effect of recent budget cuts on taxpayers and the agency’s ability to serve them. In this era of budget cuts, hiring freezes, and staffing reductions, I am concerned that the IRS cannot fully combat identity theft and tax fraud. This year, the IRS expects to spend over $330 million combating fraudulent tax refunds when its budget was cut by over $300 million. In her most recent report to Congress, the National Taxpayer Advocate states that the most serious problem facing taxpayers is that the IRS is not adequately funded to serve taxpayers and collect taxes. We will see today that the IRS is not properly funded to handle the growing identity theft problem.
We need to provide the IRS with more tools to combat identity theft today. I look forward to learning more about the recommendation to expand the agency’s access to the National Directory of New Hires. This recommendation was initially proposed by the Bush Administration in 2006 and has been in the Administration’s budget proposals every year since then. It appears to be a common-sense solution that would be a step in the right direction. The Gentlemen from Washington, Representative McDermott, and I have introduced a bill to expand the agency’s access to this database. I ask my colleagues on both sides to join us on the bill.
In closing, I would like to thank the witnesses for appearing before us today. I look forward to their testimony.
Thank you
