Senators seek remedies for tax fraud victims

The Senate’s top two tax writers are seeking to give taxpayers more protections from identity fraud.

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Government watchdogs have said that billions of dollars in refunds can be stolen in a given year, affecting hundreds of thousands of taxpayers.

The IRS has said that stopping that sort of fraud is a top priority, and that it’s now doing a better job identifying scammers. The new bill from Senate Finance Chairman Ron WydenRon WydenPuerto Rico debt relief faces serious challenges in Senate Senate panel delays email privacy vote amid concerns Overnight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns MORE (D-Ore.) and the committee’s top Republican, Sen. Orrin HatchOrrin HatchTen senators ask FCC to delay box plan An affordable housing solution both parties can get behind Puerto Rico debt relief faces serious challenges in Senate MORE (Utah), seek to give the agency even more weapons.

“Tax refund fraud is a one-two punch for taxpaying individuals,” Hatch said in a statement. “Millions of taxpayers’ identities are compromised, and all taxpayers have their tax dollars wasted.”

“We have to better protect lawful taxpayers from this nightmare issue,” Wyden added.

The proposal would force businesses to get employee information to the IRS more quickly, and to give the agency more access to a new hires database.

Scammers themselves would face stiffer penalties, while victims of fraud would get streamlined access to IRS assistance.

The measure giving more tools to the IRS comes as House Republicans have balked at giving the agency more weapons to get uncollected revenue, in response to the ongoing Tea Party controversy. Those proposals were key planks in the Senate highway proposal.