The Treasury Inspector General for Tax Administration released a report on August 30th that revealed that over 1,000,000 taxpayers had their social security numbers stolen over a five-year period in employment-related identity theft.
The thieves, mostly illegal aliens, would steal the Social Security numbers and the identity of the victims in order to get a job. Those wages would be reported by employers each year to the IRS. This activity hurts real taxpayers in one of two ways. The thief would file a tax return under the stolen identity and receive a refund from the IRS for taxes paid during the year by the real taxpayer. Then the taxpayer files the real return and the IRS tells the taxpayer that it has already sent the taxpayer (the thief) a refund. Now the taxpayer has fight to prove to the IRS that it sent the refund to the wrong person and wait months to have the situation resolved and receive any refund that the taxpayer might be entitled to.
The other way that this stolen identity might hurt the taxpayer is that the income earned by the thief would be added to the income earned by the real taxpayer, who would then owe more taxes due to a supposed higher amount of income and a supposed underpayment of taxes. Again, it would take months to get the situation straightened out.
What is particularly galling about these identity thefts is that IRS did not inform the taxpayers who had their identities stolen. They have promised to start telling the victims of new identity thefts in 2017.
Senator Daniel Coats has introduced legislation that would help protect victims of employment-related identity theft. But the real solution to this whole problem is to replace the income tax with the FairTax®. No one would have to report income or file tax returns. Thieves would not be able to steal tax refunds. And the IRS would no longer exist.
While many people believe that changing our tax system from the income tax to the FairTax is unrealistic, we aim to prove that it is viable by enacting the FairTax on the state level. If Georgia can get a FairTax passed in this state, other states will follow. And when we show just how dynamic the FairTax will be in our state, providing us with a growing economy and increased employment, the people will demand the FairTax for the country.