[Congressional Record Volume 160, Number 127 (Monday, September 8, 2014)]
[House]
[Pages H7267-H7269]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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STOPPING TAX OFFENDERS AND PROSECUTING IDENTITY THEFT ACT OF 2014
Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 744) to provide effective criminal prosecutions for certain
identity thefts, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 744
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stopping Tax Offenders and
Prosecuting Identity Theft Act of 2014'' or the ``STOP
Identity Theft Act of 2014''.
SEC. 2. USE OF DEPARTMENT OF JUSTICE RESOURCES WITH REGARD TO
TAX RETURN IDENTITY THEFT.
(a) In General.--The Attorney General should make use of
all existing resources of the Department of Justice,
including any appropriate task forces, to bring more
perpetrators of tax return identity theft to justice.
(b) Considerations To Be Taken Into Account.--In carrying
out this section, the Attorney General should take into
account the following:
(1) The need to concentrate efforts in those areas of the
country where the crime is most frequently reported.
(2) The need to coordinate with State and local authorities
for the most efficient use of their laws and resources to
prosecute and prevent the crime.
(3) The need to protect vulnerable groups, such as
veterans, seniors, and minors (especially foster children)
from becoming victims or otherwise used in the offense.
SEC. 3. VICTIMS OF IDENTITY THEFT MAY INCLUDE ORGANIZATIONS.
Chapter 47 of title 18, United States Code, is amended--
(1) in section 1028--
(A) in subsection (a)(7), by inserting ``(including an
organization)'' after ``another person''; and
(B) in subsection (d)(7), in the matter preceding
subparagraph (A), by inserting ``or other person'' after
``specific individual''; and
(2) in section 1028A(a)(1), by inserting ``(including an
organization)'' after ``another person''.
SEC. 4. IDENTITY THEFT FOR PURPOSES OF TAX FRAUD.
Section 1028(b)(3) of title 18, United States Code, is
amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C), by inserting ``or'' after the
semicolon; and
(3) by adding at the end the following:
``(D) during and in relation to a felony under section 7206
or 7207 of the Internal Revenue Code of 1986;''.
SEC. 5. REPORTING REQUIREMENT.
Not later than 180 days after the date of the enactment of
this Act, the Attorney General shall submit to the Committees
on the Judiciary of the House of Representatives and the
Senate a report that contains the following information:
(1) Information readily available to the Department of
Justice about trends in the incidence of tax return identity
theft.
(2) Recommendations on additional statutory tools that
would aid in the effective prosecution of tax return identity
theft.
(3) The status on implementing the recommendations of the
Department's March 2010 Audit Report 10-21 entitled ``The
Department of Justice's Efforts to Combat Identity Theft''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Goodlatte) and the gentleman from Georgia (Mr. Johnson)
each will control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous materials on H.R. 744, currently under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may
consume.
Identity theft is a crime that leaves its victims feeling exposed and
vulnerable while simultaneously inflicting serious financial damage
upon them and the financial institutions and government agencies they
do business with.
Unfortunately, identity theft is an expanding problem that has
recently shifted its target to include the tax refund dollars owed to
many hardworking Americans.
The Federal Trade Commission routinely issues statistics listing
identify theft as the number one consumer complaint, with American
adults having a roughly 1 in 5 chance of being victimized. Fraud
related to government benefits and documents regularly comprises the
large majority of identity theft reports.
The IRS has recognized the problem and begun shifting assets in
response to this expanding threat. In a typical example from earlier
this year in Norfolk, Virginia, two hospital workers were sentenced
following their convictions for tax-related aggravated identity theft.
Their scheme included stealing the personal information of hospital
patients and using that information to apply for Federal tax refunds.
All told, nearly 80 fraudulent returns were filed, seeking more than
$400,000 in illegitimate refunds.
For the victims of this type of fraud, the original notice is often a
rejection by the IRS of their legitimate tax returns. Not surprisingly,
this initial rejection is often only the beginning of a long and
continuing road to financial recovery. In addition to the delays
inherent in resolving their tax return dispute and receiving their
refund, the months following the discovery of the identity theft are
typically spent trying to restore their credit through an endless
stream of paperwork, including police reports, affidavits to credit
bureaus, and complaints to various consumer protection agencies.
Unfortunately, in Virginia and nationwide, this is a problem that is
only growing in magnitude, partly due to the expanding methods used by
criminals to gain access to personal information. From highly
sophisticated cyber criminal organizations engaged in activities
designed to gain access to personal data on a grand scale to individual
cases involving a lost wallet or purse, the ways in which someone with
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criminal intent can obtain our personal information are too numerous to
list.
The legislation before us today, the STOP Identity Theft Act of 2014,
is designed to strengthen the penalties associated with tax-related
identity theft. Additionally, H.R. 744 expands who can be a victim of
tax-related identity theft to include businesses and organizations,
directs the Justice Department to allocate additional resources towards
enforcement in this area, and encourages cooperation with State and
local authorities through the establishment of task forces and
otherwise.
I commend the sponsors, Ms. Wasserman Schultz and Chairman Smith, for
their dedication to this important issue, and I urge my colleagues to
join me to support this legislation.
I reserve the balance of my time.
Mr. JOHNSON of Georgia. Mr. Speaker, I yield myself such time as I
may consume.
H.R. 744, the Stopping Tax Offenders and Prosecuting Identity Theft
Act, has laudable goals of addressing the growing problem of tax return
identity theft. Unfortunately, in seeking to address one problem, the
bill creates another one.
Last Congress, the Crime Subcommittee held a hearing at which we
learned how individuals are victimized by those who file false returns
using the names and Social Security numbers of the victims.
When someone has had a false return filed in their name, they often
have to engage in an arduous process of setting the record straight
with the IRS and obtaining a refund they may be due.
In other instances, perpetrators sometimes benefit by falsely
claiming that a deceased child of another is a dependent on their own
forms. Parents of the deceased children are then subjected to the
additional grief and burden of clearing things up with the IRS.
As a longstanding advocate of personal privacy and personal privacy
rights, I am particularly concerned about these schemes which violate
the privacy of individuals in addition to imposing financial burdens.
Clearly, we need to do more to combat this type of crime.
Accordingly, I support the approach in section 2 of the bill, which
encourages the Department of Justice, using task forces, to bring its
resources to bear on the problem of tax return identity theft.
Increased effort in investigating and prosecuting these crimes is
certainly necessary, and Congress should work to provide additional
resources to support our agents and prosecutors.
Unfortunately, another provision in the bill raises serious concerns
by expanding mandatory minimum sentencing. The bill amends both the
basic identity theft statute and the aggravated identity theft statute
so that organizations, and not just individuals, may be covered as
victims.
Expanding the scope of victims under the aggravated identity theft
statute, thus, also expands the scope of mandatory penalties under the
statute, section 1028A of title 18. The penalty for aggravated identity
theft is a mandatory term of imprisonment of 2 years or, for an offense
related to terrorism, 5 years. While I oppose this expansion of the
mandatory minimum sentences, I do not oppose the imposition of
appropriate sentences for this offense as warranted under the
circumstances of each case.
With respect to the proposed expansion of the coverage of the
aggravated identity theft statute to organizations, Congressman Bobby
Scott, ranking member of the Crime Subcommittee, offered an amendment
at markup to narrowly prevent application of mandatory sentences to the
expansion, but instead allow for even higher sentences for those
offenses, but at the judges' discretion. As a result, judges would have
the flexibility to impose even greater sentences, when warranted, but
they would not be required to impose mandatory minimums. Unfortunately,
the amendment was not adopted, leaving H.R. 744 with a serious flaw
that violates sound sentencing policy.
Mandatory minimums have been studied extensively and have been found
to distort rational sentencing systems to discriminate against
minorities, to waste the taxpayers' money, and to often violate common
sense. Even if everyone involved in a case--from arresting officer,
prosecutor, judge, and victim--believes that the mandatory minimum
would be an unjust sentence for a particular defendant in a case, it
still must be imposed.
Mandatory minimum sentences, sometimes based merely on the name of
the crime, unwisely remove sentencing discretion from the judge.
Regardless of the role of the offender in the particular crime, the
offender's record or lack thereof, or the facts and circumstances of
the case, the judge has no choice but to impose the mandatory minimum
set by legislators long before the crime has been committed. Such a
policy is unjust and unwarranted. The expansion of mandatory minimum
sentencing in this bill is, therefore, problematic.
For these reasons, I cannot support this well-intentioned but flawed
bill.
I reserve the balance of my time.
Mr. GOODLATTE. Mr. Speaker, at this time, it is my pleasure to yield
such time as he may consume to the gentleman from Texas (Mr. Smith),
the chairman of the Science, Space, and Technology Committee and the
lead Republican cosponsor of this legislation.
Mr. SMITH of Texas. Mr. Speaker, I thank the gentleman from Virginia,
the chairman of the Judiciary Committee, for yielding me time, and I
also want to thank him for bringing this bill to the House floor today.
H.R. 744, the STOP Identity Theft Act, is a bicameral, bipartisan
solution that curbs the rapidly increasing problem of tax return
identity theft. I am the original cosponsor of this bill, with
Congresswoman Debbie Wasserman Schultz, who has long taken the
initiative on this pressing subject.
The STOP Identity Theft Act increases criminal penalties for tax
return ID theft. The bill also broadens the definition of identity
theft victims to include businesses and nonprofit organizations.
In recent years, tax thieves have received billions of dollars in
fraudulent tax returns. These criminals have become proficient in
stealing identity information and Social Security numbers to file false
tax returns with the IRS, oftentimes before the legitimate taxpayer
files a return themselves. It is only after a tax return is rejected
that the victim learns that their identity has been stolen and their
tax return wrongfully pocketed.
H.R. 744 is crucial to deter the number of individuals and families
who are victimized by ID tax thieves. Identity theft costs victims both
money and time to restore their identities.
The House previously adopted this bill by voice vote in the last
Congress. This past February, the Senate Judiciary Committee passed a
companion bill to the STOP Identity Theft Act by Senators Klobuchar and
Sessions. So I urge my colleagues again to join me in support of H.R.
744 to protect American taxpayers.
I thank the Judiciary Committee chairman again, Mr. Goodlatte, for
bringing this legislation to the House floor and the gentlewoman from
Florida (Ms. Wasserman Schultz) for her efforts to stop tax identity
theft.
Mr. JOHNSON of Georgia. Mr. Speaker, I yield as much time as she may
consume to the gentlewoman from Florida, the Honorable Debbie Wasserman
Schultz.
Ms. WASSERMAN SCHULTZ. I thank the gentleman for yielding.
Mr. Speaker, I rise today to urge my colleagues to support H.R. 744,
the Stopping Tax Offenders and Prosecuting Identity Theft Act of 2014
or, simply, the STOP Identity Theft Act.
Over the past several years, we have all witnessed the crime of tax
return theft explode into a nationwide epidemic. It is time for
Congress to act and let would-be thieves know that there will be
serious consequences if they engage in this crime.
Thank you to Congressman Lamar Smith for leading this effort with me
over the past 3 years. I hope that we can finally get this legislation
over the finish line so law enforcement has more tools in the fight
against crime. Working with our Senate sponsors, Senator Amy Klobuchar
and Senator Jeff Sessions, I know that we can get this done.
Thank you to Chairman Goodlatte and to his intrepid staffer Caroline
Lynch for your support and your leadership to help bring this bill to
the floor today.
We have all heard stories of tax refund thefts. An unsuspecting
taxpayer
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goes to file their tax return only to be told by the Internal Revenue
Service that someone else has already filed their return and claimed
their hard-earned tax refund.
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Tax return identity theft wreaks emotional and financial havoc on
hardworking taxpayers and costs the Federal Government billions of
dollars.
According to a recent Treasury Department report, the number of
stolen tax return refunds skyrocketed in just the last year--going from
approximately 1.1 million stolen returns in 2011 to more than 1.8
million in 2012--a 69 percent increase. And the cost to the U.S.
Treasury and the American taxpayers is staggering--nearly $9 billion in
just the last 2 years and $21 billion in the last 5 years, Mr. Speaker.
We cannot allow billions of taxpayer dollars to be stolen from
hardworking Americans and from our Treasury. This will only get worse
unless we act.
We also must protect the thousands of taxpayers that fall victim to
this crime, many of whom are vulnerable groups like seniors, veterans,
and minors. Seniors in my south Florida community have been
particularly hard-hit by this crime, and I simply couldn't stand by and
let it continue.
Even though victims of tax return theft eventually are reimbursed by
the U.S. Treasury, it can take many months and a lot of frustration to
set things straight. Many of these victims rely on a timely tax return
just to pay the bills.
These tax return identity thieves hide behind a veil of technology by
stealing Social Security numbers and filing false electronic returns
where the payoffs are almost instantaneous. Right now, more thieves and
criminal organizations are turning to this lucrative crime because law
enforcement lacks the kind of stiff criminal penalties afforded many
other forms of identity theft. In this instance, technology has simply
outstripped the enforcement tools currently on the books. The STOP
Identity Theft Act brings together several measures to strengthen
criminal penalties and increase the prosecution rate of tax return
identity thieves.
First, this bill amends the identity theft statute to increase the
maximum penalties for the crime of tax return identity theft. Right
now, this crime is seen as low risk and high reward for would-be
thieves. Toughening sentencing for tax return identity thieves will
help deter this kind of crime.
The legislation also expands the definition of ``identity theft
victim'' to include businesses and charitable organizations. Often,
these organizations have their identities stolen and they are used in
``phishing'' schemes to extract the sensitive information from
unsuspecting taxpayers used in tax return thefts. These thieves then
use the harvested information to file thousands of fraudulent tax
returns.
This amendment to the identity theft statutes will ensure that
thieves who misappropriate the identities of any business, be it a
small business or a nonprofit organization, can be prosecuted. The STOP
Identity Theft Act also calls for better coordination between the
Department of Justice and State and local law enforcement to make the
most efficient use of the law and resources.
My own local law enforcement agencies in south Florida have been
inundated with crime reports of tax return identity theft, and they
need all the help we can provide.
This legislation is not the end-all, be-all to the congressional
efforts to combat tax return identity theft, but it is a strong,
bipartisan beginning. It is intended to provide targeted tools to law
enforcement right away so that they are better prepared before next tax
season rolls around.
Finally, the legislation also calls for DOJ to report back on trends
in tax return identity theft, on progress in prosecuting these crimes,
and recommendations for additional legal tools to combat it.
Information and data on trends about tax return identity theft can be
valuable tools to detect and prevent future fraud, and it will inform
Congress of additional legislative actions that will help in the
effort.
I also send a big thank you to the various organizations that have
supported and helped craft this legislation, including the National
Conference of CPA Practitioners, the Committee for Efficient
Government, the American Coalition for Taxpayer Rights, the Council for
Citizens Against Government Waste, and the National Association of
Counties.
Together, we all must ensure that Federal laws keep pace with
emerging crimes such as tax return identity theft. It is time to make
the prosecution of this crime a greater priority. The STOP Identity
Theft Act is an important step towards this goal, and I urge my
colleagues to support this legislation.
Mr. JOHNSON of Georgia. Mr. Speaker, I yield back the balance of my
time.
Mr. GOODLATTE. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Goodlatte) that the House suspend the
rules and pass the bill, H.R. 744, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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