As we approach the dreaded tax return filing season, the IRS is contemplating ways to crack down on those who would like to steal tax refunds. Reuters reports that in response to $130 million in stolen tax funds since last year, Florida Senator Bill Nelson has proposed new legislation that will allow the IRS to share tax return information with police. A pilot program in Tampa, Florida is being considered by the IRS due to the area being rampant with identity theft and tax refund fraud. The program would allow the IRS to share bogus tax return information with local law enforcement where fraud is suspected. Currently laws only allow the sharing of such information if the victim gives his or her permission.
The law that currently prevents the IRS from sharing taxpayer information has been on the books since 1976 when Congress made it a crime to disclose this confidential information. Nina Olson, national taxpayer advocate for the IRS, cautions that while some sharing may be necessary in some cases, there is a possibility that unauthorized parties could gain access to it. She proposes a modification of the 1976 law to allow access to the information but only for law enforcement purposes.
Privacy concerns are the main antagonist of the proposed law and program. As of yet, no date has been set for the Tampa pilot program to begin. However, if the program is successful, one should expect an increase in the number of criminal prosecutions for tax fraud.