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IRS had trouble helping identity theft victims due to budget constraints, TIGTA says

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The Internal Revenue Service is having trouble assisting identity fraud victims because of budget constraints imposed by Congress over the last few years, according to the Treasury Inspector General for Tax Administration.

In testimony (pdf) at a Senate Budget Committee field hearing in Manchester, New Hampshire, Inspector General J. Russell George said to provide relief to victims of identity theft, the IRS began issuing Identity Protection Personal Identification Numbers to eligible taxpayers in fiscal 2011.

The identity theft victim uses the PIN for tax filing to prevent further misuses of the person's Social Security number.

The IRS also decided to assign a dedicated employee to work with each identity theft victim. However, with Congress slashing the agency's budget over the last few years, the IRS couldn't afford to assign a single employee for each identity theft victim.

Because of that, George told the committee, TIGTA found that not all eligible individuals are receiving a PIN. Specifically, in September 2014, the IRS did not provide a PIN to 532,637 taxpayers who had an identity theft indicator on their tax account.

The IRS also did not provide a PIN to 24,628 taxpayers whose Personally Identifiable Information had been lost by or stolen from the IRS, George said.

The testimony falls in line with what TIGTA has said repeatedly. Budget cuts have degraded service at the IRS, leaving the agency with too few employees for the ever increasing workload.

For more:
- download the TIGTA testimony (.pdf)

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