Social Security has always collected death information so it can stop benefits to those who have died and start benefits for their survivors. Today about 2.5 million death reports are received from many sources, including families, funeral homes, hospitals, financial institutions, States and Federal agencies. Social Security shares death records with other Federal benefit paying agencies, like the Veterans Administration.
A 1980 Freedom of Information Act court-mandated settlement required Social Security to also make information about deceased Social Security number holders available to the public. Under the Freedom of Information Act, deceased individuals have no privacy rights, so their personal information can be disclosed. In response, Social Security created the so-called Death Master File. Soon afterwards, in 1983, Congress changed the law to protect death reports received from States. The information in the Death Master File comes from non-State sources and the file is sold to the public by the Department of Commerce.
Over time, a broad commercial interest has developed in the Death Master File for use in private benefits management and as a tool to prevent fraud and identity theft. Many groups purchase the file from the Commerce Department including government agencies, credit reporting agencies, financial institutions, law enforcement organizations, and medical and genealogical researchers.
But what made sense thirty years ago, no longer makes sense today. Identity thieves who get their hands on a Social Security number can reap instant rewards, while the rightful owner has no idea what has happened.
With 84 million listed individuals and 1.5 million new individuals added each year, it appears that this File has become a resource for criminals seeking to capitalize on Americans’ identities, particularly the identities of deceased children.
In her recent annual report to Congress, the National Taxpayer Advocate found that the Federal government facilitates tax-related ID theft through the release of the Death Master File. In no uncertain terms, the National Taxpayer Advocate states in the report that she “is appalled that the federal government is making sensitive personal information so readily available, when such information can easily be used to commit identity theft.”
We will hear the heartbreaking story of the Agin family, whose four year old daughter had her identity stolen shortly after she passed away. Only when their tax return was rejected by the IRS, did the Agins learn that an identity thief had already filed a return claiming their child as a dependent.
Worrying about a lost loved one’s Social Security number is a burden no grieving family should bear. That’s why I, along with a number of my colleagues, introduced H.R. 3475, the “Keeping IDs Safe Act of 2011,” to protect this information. Even Social Security reports that approximately 14,000 living individuals are wrongly placed on the Death Master File each year. Any one of us could find ourselves mistakenly on that list – an inexcusable mistake that exposes our personal information and could cause severe personal and financial hardship.
Through our witnesses today we will learn more about the history of the Death Master File, its accuracy, and how it’s used. Soon this Subcommittee will hold a joint hearing with the Ways and Means Oversight Subcommittee to more closely examine identity theft in the tax system.
Americans rightfully deserve action to stop thieves from exploiting our deceased loved ones.