Does the IRS's 'Get Transcript' Program Really Get It?
The IRS has had significant problems in protecting taxpayers from identity theft (including cases where the IRS's own employees were complicit).
A recent posting by this commentator, discussing Congress's efforts to embargo the information in the Death Master File as a questionable remedy to stolen identity tax fraud, observes that most identity theft tax fraud involves stealing the identities of living persons, and that "cutting off access to the DMF may well protect deceased children, but will not stop identity theft tax fraud."
Now, backed by the White House, the Department of Education has announced an "Education Datapalooza" program to improve college access and affordability (maybe if the DoE would cut back on the number of reporting requirements it imposes on the individual educational institutions, the cost of education might actually be brought under control).
Part and parcel of this "Datapalooza" is the IRS's new "Get Transcript" program, whereby individual taxpayers can access their IRS data transcripts, which will allow them to participate in Income-Driven Repayment programs.
This "Get Transcript" program is likely a very welcome development amongst the identity thief community. If indeed the revelations that the IRS blindly issues tax refunds based upon random data on tax returns have shamed the IRS into verifying the data, the "Get Transcript" program, when (im)properly used, would enable the identity thieves to enter consistent numbers on the fraudulent tax returns they file, thereby facilitating the orderly issuance by the IRS of the falsely-claimed refunds.
If this posting waxes cynical, it is because the IRS has an extremely poor track record with its data stewardship practices. As previously noted by this commentator, the IRS became aware of the problem no later than 1998, when Alan Scott was convicted of filing 20 stolen identity tax returns. Indeed, Nina Olson, the National Taxpayer Advocate, insists in her 2013 Report to Congress that
"...the IRS should rethink how it views identity theft. It must recognize that identity theft is a traumatic crime. A person's identity is core to his or her being - when someone steals and uses your identity, it is an invasion of your person. The IRS's approach to assisting the victims ignores this important fact, and in many ways treats the victim as someone experiencing a minor inconvenience instead of a frightening personal disaster."
If the IRS's institutional attitude towards identity theft is in fact so deficient, then, in all likelihood, identity theft countermeasures have been accorded a very low priority in the IRS's "Get Transcript" program.
Time will tell, but the announcement of this "Get Transcript" program is one of those rare instances when tax attorneys such as myself hope to be proven incorrect by the IRS.
Kenneth H. Ryesky is a lawyer who teaches Business Law and Taxation at Queens College CUNY. He formerly served as an attorney for the IRS.