[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]




                              {time}  1600
   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

[[Page H7268]]

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

[[Page H7269]]

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.

                              {time}  1615

  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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