Questions and Answers on Employment Identity Theft: TIGTA, IRS and Justice Departement

By Terence P. Jeffrey | March 16, 2018 | 11:12 AM EDT

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(CNSNews.com) - [The following was published along with the March 16, 2018 story: “IRS Documented 1.3M Identity Thefts by Illegal Aliens; Can’t Say It Referred Any for Prosecution”]

CNSNews.com sent questions and follow-up questions to the Treasury Inspector General for Tax Administration and the Internal Revenue Service based on information in TIGTA reports about the misuse of Social Security Numbers by aliens whom the IRS has given Individual Tax Identification Numbers (ITIN). These reports include the February 12 report, “Most Employment Identity Theft Victims Have Not Been Notified That Their Identities Are Being Used by Others for Employment.”

CNSNews.com also sent questions based on this report to the Department of Justice.

Below are CNSNews.com’s questions (in bold text) and the responses (in plain text) from TIGTA, the IRS and the DOJ.

Questions sent to the Treasury Inspector General for Tax Administration on February 22 and the responses TIGTA provided on February 27:

1-What is the correct number for the number of tax returns in PY 2017 that were discovered to have been filed by an ITIN holder who committed employment identity theft against a legitimate Social Security Number holder?

TIGTA: “We identified 1,227,579 electronically filed tax returns, processed in PY 2017 through April 18, 2017, in which the Individual Taxpayer Identification Number on the return does not match the Social Security Number on the Form W-2.  Note that a Social Security Number may have been used on Form W-2 for more than one of these returns.”

If this number is not known, how many individual cases of employment identity theft by ITIN holders in PY 2017 have TIGTA or the IRS uncovered?

2-Do the 1,346,485 taxpayer accounts that the IRS placed an employment identity theft marker against in PY 2011 through 2016 represent legitimate Social Security Number holders whose identities were stolen by foreign nationals holding ITINs?

TIGTA: “The 1,346,485 taxpayer accounts represent taxpayers whose Social Security Numbers were used to report income by an Individual Taxpayer Identification Number taxpayer on an electronically filed tax return.”

3-How many of these cases in PY 2011 through PY 2016 and how many in PY 2017 did the IRS refer to federal law enforcement for criminal investigation and prosecution? How many did they not refer to law enforcement and why not?

TIGTA: “We do not have this information.”

4-The average 2.4 million tax returns filed each year by ITIN holders that include reported wages far exceed the number of taxpayer accounts given an employment identity theft marker, is this because some of those 2.4 million use fictitious Social Security Numbers, or no number at all, rather than a stolen SSN? What are the reasons for this numerical difference?

TIGTA: “We do not have this information.”

Follow-up questions CNSNews.com sent to TIGTA on March 14 and the responses TIGTA provided on March 15:

1-Did all of the 1,227,579 electronically filed tax returns processed in PY 2017 through April 18, 2017 that included an Individual Taxpayer Identification Number on the return that did not match the Social Security Number on the Form W-2 have a real Social Security Number on the Form W-2 that had actually been issued to someone by the Social Security Administration or did some of them have fake Social Security Numbers that have never been issued to anyone?

TIGTA: “Both situations existed some were valid (SSN issued by SSA) and some were fabricated.”

2-If some of the Social Security Numbers on the Forms W-2 filed with those 1,227,579 electronic returns were fake and some were real, how many of those 1,227,579 returns had real Social Security Numbers that belonged to someone other than the ITIN holder who had filed the return and how many had fake Social Security Numbers? 

TIGTA: “Over 1 million were valid (SSN issued by SSA) remainder were fabricated.”

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Questions CNSNews.com sent to the Internal Revenue Service on February 28:

1-How many of 1,227,579 electronically filed returns, processed by the Internal Revenue Service in PY 2017 through April 18, 2017, on which the Individual Taxpayer Identification Number did not match the Social Security Number on the Form W-2, were referred by the IRS to the Department of Justice for criminal investigation?

2-How many of the 1,346,485 cases in PY 2011 through 2016, where the IRS marked the taxpayer’s account because the taxpayer’s Social Security Number was used by an Individual Taxpayer Identification Number holder to report income to the IRS, were referred by the IRS to the Department of Justice for criminal investigation?

3-If the IRS did not refer some, or any, of these cases to the Department of Justice for criminal investigation, why not?

Follow-up questions that CNSNews.com sent to the IRS on March 1:

1-Is it the policy of the IRS not to make prosecution recommendations to the Justice Department aimed at prosecuting ITIN holders who stole someone’s Social Security Number and used it to engage in employment identity theft as opposed to refund fraud?

2-If in fact the IRS does make prosecution recommendations to the Justice Department in cases where an ITIN holder steals a Social Security Number to engage in employment identity theft as opposed to refund fraud, how many prosecution recommendations did the IRS make to the Justice Department in such cases in fiscal years 2010 through 2017?

3-Can the IRS provide specific examples of prosecution recommendations it made to the Department of Justice in fiscal years 2010 through 2017 in cases where an ITIN holder committed employment identity theft—but not refund fraud--and where the ITIN holder was successfully prosecuted?

This is the statement the IRS sent on March 8 in response the questions posed by CNSNews.com:

Internal Revenue Service: “Over the last few years, IRS-Criminal Investigation prioritized its limited resources pursuing identity thieves who stole millions of identities from innocent taxpayers and applied for, and received, tax refunds based on those identities. 

“Additionally, based on how IRS-CI captures case-related information and how prosecutions are based (the federal violation utilized), it is not possible to ascertain the exact information for the question regarding how many cases IRS pursued criminally where ITIN holders utilized another individuals’ SSN. 

“To put it another way, in investigating the type of criminal activity that you inquired, IRS-CI, in addition to its traditional criminal tax statutes, would also likely utilize other statutes, such as 18 USC 661, 18 USC 1028 or 18 USC 1028(A), which carry a more significant impact than the law cited in the 2004 TIGTA report regarding the fraudulent misuse of a social security number.”

Questions that CNSNews.com sent to the Justice Department on February 28:

1-How many of 1,227,579 electronically filed returns, processed by the Internal Revenue Service in PY 2017 through April 18, 2017, on which the Individual Taxpayer Identification Number did not match the Social Security Number on the Form W-2, were referred by the IRS to the Department of Justice for criminal investigation?

2-How many of the 1,346,485 cases in PY 2011 through 2016 where the IRS marked the taxpayer’s account because the taxpayer’s Social Security Number was used by an Individual Taxpayer Identification Number holder to report income to the IRS were referred by the IRS to the Department of Justice for criminal investigation?

3-If the IRS did not refer some, or any, of these cases to the Department of Justice for criminal investigation, why not?

4-Does the Department of Justice want the Internal Revenue Service to hand over to it the information that DOJ would need to pursue these cases to make sure that the laws prohibiting employment identity theft are enforced?

Statement that the Department of Justice sent in response to CNSNews.com’s questions on February 28:

Department of Justice spokesperson: “We don’t confirm or deny investigations or comment on referrals.”

 

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