The Ways and Means Oversight Subcommittee, chaired by Rep. Peter Roskam (R-IL), today held a hearing with Internal Revenue Service Commissioner John Koskinen to review the tax filing season and examine ways to better serve taxpayers and prevent fraud.
Members on both sides of the aisle acknowledged the steps the IRS has taken to safeguard taxpayer information but agreed the agency must do more to protect taxpayers from rampant tax-related identity theft and cybersecurity attacks.
As Chairman Roskam said:
“Fraud related to identity theft is growing at an alarming rate – it’s a serious crime that hurts millions of Americans and costs the government billions of dollars.
“In 2012, the Treasury Inspector General for Tax Administration, or TIGTA, reported the IRS could pay out $21 billion in fraudulent refunds over five years … While the IRS has taken some steps to prevent and detect identity theft, the agency is not keeping up with the criminals.”
Two nonpartisan government watchdogs – the Government Accountability Office (GAO) and the Treasury Inspector General for Tax Administration (TIGTA) – have repeatedly expressed concerns that the IRS’s efforts to prevent fraud are insufficient. At the hearing, witnesses from GAO and TIGTA highlighted the agency’s failure to effectively implement many of their recommendations to better protect Americans during tax season – including fixing the authentication system to prevent fraudsters from accessing taxpayer information.
Members also expressed concern that because of cybersecurity hacks, such as the Get Transcript hack, criminals now frequently have access to all of the taxpayer’s information. This means they can file fraudulent returns that are completely identical to the legitimate return. To combat this, the IRS needs to step up its data analytics and work with other stakeholders to share information more effectively.
When Rep. Pat Meehan (R-PA) asked about how to improve the authentication system, members and witnesses agreed the IRS faces many challenges. Commissioner Koskinen admitted part of the problem is that the agency runs “the world’s most complicated tax system.” Rep. Jim Renacci (R-OH), who personally experienced tax-related identify theft, responded, “the real answer is we have to simplify the tax code.”
As House Republicans work toward a fairer, flatter, simpler tax code, the Ways and Means Oversight Subcommittee will continue to make the IRS accountable to the American people through commonsense legislative solutions and ongoing oversight of the agency.
As Chairman Roskman concluded:
“It’s clear the IRS’s existing efforts to address identity theft and cybersecurity attacks are not enough …The troubled agency’s failure to improve its information security puts all of us at risk. We need to hold the IRS accountable for protecting taxpayer information and strengthening security. That starts right here, right now.”
For more information about today’s hearing, click here.