The U.S. House of Representatives has passed a bill aimed at protecting people from potential tax fraud. The bill, H.R. 3832, was introduced to curb the recurring problem of tax fraud being committed by identity theft.

Tax-related identity theft occurs when someone uses a stolen Social Security number in order to file a return attempting to claim a fraudulent refund. Those who are victims of this crime may not even be aware that it has occurred until they attempt to file a return to find that a return has already been filed using their Social Security number. In this case, they would receive a letter from the IRS stating that the IRS has identified a suspicious return using the taxpayer’s Social Security number.

Identity theft tax fraud has been rising the past few years. In fact, in the IRS’ most recent list of common tax schemes, which they nicknamed the “Dirty Dozen,” identity theft tax fraud topped the list. In 2015, the U.S. Federal Trade Commission (FTC) reported that there had been 490,000 complaints of identity theft tax fraud. That’s a 47 percent increase from 2014.

H.R. 3832 was introduced by Rep. Jim Renacci (R-OH) on October 26, 2015 and was titled the Stolen Identity Refund Fraud Prevention Act of 2016. Cosponsoring the bill was Rep. John Lewis (D-GA) who also is a ranking member on the Ways and Means Subcommittee on Oversight. The bill passed the House on May 16 and will now move to the Senate.

This bill also includes several provisions that are aimed to help those that become victims of identity theft tax fraud. These include establishing a centralized point of contact within the IRS for identity theft victims, improving taxpayer notification of identity theft, requiring the IRS to submit a feasibility study on establishing a program for victims of identity theft tax fraud to opt out of electronic filing, and establishing an Information Sharing and Analysis Center (ISAC) that will collect, analyze, and share data and information that will help to detect and prevent identity theft.

H.R. 3832 originally included a provision that would require that W-2 forms be filed both with taxpayers and the Social Security Administration (SSA). However, that provision was included in the extenders bill last year that goes into effect for the 2016 tax year. The original draft of the bill also addressed the issue of the easy availability of Social Security numbers on tax forms. Previously, Social Security numbers could only be truncated on 1099 forms. Now, employers will be able to do the same on Social Security numbers that are printed on W-2 forms. It’s another form of security for taxpayers.

This specific bill came about as there was a spike in identity theft tax fraud and the fact that it effected the bill’s main sponsor, Rep. Renacci. Last year, Rep. Renacci said someone stole his identification to file a fraudulent tax return in his name claiming a refund. The congressman said he didn’t learn of the criminal act until he was sent a notice by the IRS questioning the return he had filed. The problem was that Rep. Renacci had yet to file his return. This inspired the Northeast Ohio representative to attempt to solve this issue through federal legislation.

Adding to Rep. Renacci’s concern over this matter is his background. After graduating from Indiana University of Pennsylvania in 1980 with a degree in Business Administration, Renacci became a Certified Public Accountant (CPA). He would continue his career as a CPA over the next 30 years until he was elected to Congress in 2010.

If you’ve become a victim of tax-related identity theft, the FTC recommends filing a complaint with the FTC at, contacting one of the three major credit bureaus (Equifax, Experian, TransUnion) to place a ‘fraud alert’ on your credit records, and contacting your financial institutions to close any financial or credit accounts that may have been opened without your permission or that may have been tampered with by identity thieves.

Tax-related identity theft can be a traumatizing experience for the victim but this new bill currently going through Congress has been developed to protect people from experiencing such a crime. For more information on filing returns or to receive the maximum refund available to you, come into G.I. Tax and meet with our professionals.