How IRS Protects ID Thieves
Millions of Americans have fallen victim to ID theft during tax season, when fraudsters file false returns in an attempt to steal other people’s refunds.
Victims face delays in getting their real refunds, and paperwork nightmares that can drag on for months. In an attempt to survey the damage, some have asked the IRS for a copy of the fake returns, but Bloomberg reports that the agency has denied such requests, despite consumer-protection regulations intended to help victims in these situations.
The rules protecting consumers apparently conflict with tax laws that prevent its agents from sharing bogus returns and impose a penalty of up to five years in prison and a $250,000 fine for IRS workers who violate that law. “Employees face the specter of felony charges for giving out private details — including, possibly, those of the identity thieves — to those who aren’t authorized,” according to Bloomberg.
Related: 3 Costly and Common Tax Scams to Avoid
Tax refund fraud has ballooned in recent years. While electronic filing has made the tedious process of filing taxes more bearable for consumers, it has also made it easier for criminals to scam the system by filing phony returns using stolen Social Security numbers. Scammers bilked the IRS out of $5.8 billion in fraudulent tax refunds in 2013, a number auditors expected would climb much higher in the most recent tax season. (Numbers haven’t yet been released for 2014 returns).
Electronic fraud became such a problem this year that TurboTax briefly suspended state returns for customers in February to deal with ID theft issues.
If the IRS is of limited help to victims, that’s all the more reason to make sure your information is protected. You can find some tips to reduce your risk of ID theft here.
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Map of the Day: Navigating the IRS
The Taxpayer Advocate Service – an independent organization within the IRS whose roughly 1,800 employees both assist taxpayers in resolving problems with the tax collection agency and recommend changes aimed at improving the system – released a “subway map” that shows the “the stages of a taxpayer’s journey.” The colorful diagram includes the steps a typical taxpayer takes to prepare and file their tax forms, as well as the many “stations” a tax return can pass through, including processing, audits, appeals and litigation. Not surprisingly, the map is quite complicated. Click here to review a larger version on the taxpayer advocate’s site.
A Surprise Government Spending Slowdown
Economists expected federal spending to boost growth in 2019, but some of the fiscal stimulus provided by the 2018 budget deal has failed to show up this year, according to Kate Davidson of The Wall Street Journal.
Defense spending has come in as expected, but nondefense spending has lagged, and it’s unlikely to catch up to projections even if it accelerates in the coming months. Lower spending on disaster relief, the government shutdown earlier this year, and federal agencies spending less than they have been given by Congress all appear to be playing a role in the spending slowdown, Davidson said.
Number of the Day: $203,500
The Wall Street Journal’s Catherine Lucey reports that acting White House Chief of Staff Mick Mulvaney is making a bit more than his predecessors: “The latest annual report to Congress on White House personnel shows that President Trump’s third chief of staff is getting an annual salary of $203,500, compared with Reince Priebus and John Kelly, each of whom earned $179,700.” The difference is the result of Mulvaney still technically occupying the role of director of the White House Office of Management and Budget, where his salary level is set by law.
The White House told the Journal that if Mulvaney is made permanent chief of staff his salary would be adjusted to the current salary for an assistant to the president, $183,000.
The Census Affects Nearly $1 Trillion in Spending
The 2020 census faces possible delay as the Supreme Court sorts out the legality of a controversial citizenship question added by the Trump administration. Tracy Gordon of the Tax Policy Center notes that in addition to the basic issue of political representation, the decennial population count affects roughly $900 billion in federal spending, ranging from Medicaid assistance funds to Section 8 housing vouchers. Here’s a look at the top 10 programs affected by the census:
Chart of the Day: Offshore Profits Continue to Rise
Brad Setser, a former U.S. Treasury economist now with the Council on Foreign Relations, added another detail to his assessment of the foreign provisions of the Tax Cuts and Jobs Act: “A bit more evidence that Trump's tax reform didn't change incentives to offshore profits: the enormous profits that U.S. firms report in low tax jurisdictions continues to rise,” Setser wrote. “In fact, there was a bit of a jump up over the course of 2018.”
