Strip tax pirates of secrecy cloak

The IRS does a good job of not leaking personal information we taxpayers are required to report. It is also good at guarding the confidentiality of someone pretending to be you and stealing a big refund in your name.

Tampa police complain that federal privacy laws are giving too much cover to identity thieves who, evidence shows, are collecting millions of dollars in fraudulent payments here in Tampa. Victims of identity theft say it takes many months, and many frustrating calls to the IRS, to get problems resolved and to collect the money they’re owed.

Meanwhile, the thieves could have cashed their checks and moved on to steal more under another phony identity. Just a little timely light would disrupt this shadowy intrigue.

A bill proposed by U.S. Rep. Kathy Castor of Tampa would give police a much-needed way to fight back against tax fraud. The bill also would require timely government help for honest taxpayers and not significantly compromise privacy.

The new law would allow the IRS to work with local, state or federal police agencies and to share tax information pertinent to the investigation, but only with the officers and detectives personally involved in the case.

The Tampa Democrat also wants to give the IRS a 90-day deadline for taking action on taxpayer complaints of fraud and identity theft. If the IRS is so overwhelmed with fake forms that it can’t meet that deadline, Congress and the public deserve to know.

A few weeks ago, the Tribune reported that a Largo couple filed suit against the IRS for delaying their refund. Someone else apparently got a refund in their name; the IRS couldn’t tell them how much or where the check was mailed. In what Jay and Christine Gordon hope becomes a class-action suit on behalf of all taxpayers in a similar situation, they are demanding a faster response from the IRS. After they sued, they did get their refund of $2,570, but their complaint remains valid.

Instead of using living taxpayers, sometimes phony filers use the Social Security numbers of dead people. These names are available through the Social Security Death Index. Castor’s bill would limit information about recent deaths to those demonstrating a “legitimate fraud prevention interest.” That part of the bill seems overly restrictive. Biographers, reporters and genealogy researchers appreciate having access to the death list.

If someone is officially listed as dead and their Social Security number has been retired, it’s hard to understand why the IRS would mail a check to a person claiming to have that number, without first investigating for possible fraud. If an officially dead person is mailing in a form, either the index has an error that needs correcting or the person asking for payment is a thief who needs to be caught.

Castor’s bill also would require the IRS to tell Congress each year how many reports of possible fraud were reported by state and local police agencies and what was done about each one.

If what Tampa police and the U.S. Postal Service uncovered here last year is any indication, lax oversight of tax credits has turned thousands of petty thieves into high rollers.

A big part of the problem is that the tax code forces the IRS to do more than collect the right amount of taxes and refund money to those from whom too much was withheld. The IRS also must mail big checks directly to qualified needy families, and the agency has been under political pressure to do it fast.

Prompt delivery of the money appears to have taken priority over carefully safeguarding against fraud. This bill is an overdue attempt to slow down the wholesale looting of the Treasury. It merits urgent consideration in Congress.