Senators Collins, Jones Introduce Legislation to Prevent Con Artists from Stealing Americans’ Tax Refunds

Bipartisan bill incrementally expands and makes permanent the IRS’ Identity Protection PIN pilot program

Identity theft tax refund fraud cost Americans $1.7 billion in 2016.


Click HERE to read Senator Collins’ remarks on the Senate floor

Click HERE to watch Senator Collins’ remarks on the Senate floor

Note to assignment editors and news directors: Click HERE for a high-resolution video of Senator Collins’ remarks


Washington, D.C. – This week marks the official start of tax filing season, when Americans are eligible to submit their 2018 tax returns to the Internal Revenue Service (IRS).  Unfortunately, con artists will also use this opportunity to begin filing fraudulent tax returns in an attempt to steal the refunds that are due to other taxpayers.  While the IRS has made significant progress in combatting identity theft refund fraud, it continues to be one of the biggest challenges facing the agency, costing victims a total of $1.7 billion in 2016 alone. 


In order to thwart identity theft tax refund fraud and prevent American taxpayers and seniors from falling victim, U.S. Senators Susan Collins (R-ME) and Doug Jones (D-AL) introduced the Taxpayer Identity Protection Act, which would require the IRS to expand its Identity Protection PIN (IP PIN) pilot program nationwide over the next five years.  In remarks from the Senate floor, Senator Collins urged her colleagues to support their bipartisan legislation to protect Americans’ tax refunds.


“Having an IP PIN has proven to protect against identity theft.  This is a concrete action that we can take to help protect taxpayers from being ripped off by criminals and ensure that they receive the refunds to which they are entitled,” said Senator Collins.  “The IRS supports the expansion of this vital program over the next five years.  I encourage my colleagues to vote for the adoption of our bipartisan bill.”


“The IP PIN pilot program has shown it can effectively defend taxpayers from the growing risk of identity theft, and it is critical that we take this next step to expand the program,” said Senator Jones. “As these threats grow, it’s important that the federal government make every effort to help protect taxpayers’ identities. While doing so, this program can also help save billions of dollars by preventing fraudulent tax returns.”


Identity theft refund fraud occurs when a scammer files a false tax return using a stolen Social Security number (SSN) and other personal information and receives a tax refund from the IRS.  These fraudulent tax refund payments waste taxpayer dollars, jeopardize the legitimate refunds of taxpayers, and threaten the integrity of the IRS.


An IP PIN is a six-digit number assigned to eligible taxpayers that allows their tax returns and refunds to be processed without delay and helps prevent the misuse of their SSNs on fraudulent income tax returns.  If a tax return is filed with a Social Security number and an incorrect or missing IP PIN, the IRS’ system automatically rejects the return until the identity of the filer can be confirmed.  According to the IRS, the IP PIN program rejected approximately 7,376 fraudulent e-filed tax returns in just one month during last year’s tax filing season.


While taxpayers would not be required to use an IP PIN, Senators Collins and Jones’ legislation would allow them to opt-in to the program if they desire an extra layer of identity protection.  The five-year incremental expansion would provide accountability that the IRS is adequately building out the IP PIN program, while at the same time ensuring taxpayers have access to the extra layer of security as soon as possible.  Since 2013, the IRS program has only offered IP PINs to victims of identity theft as well as all residents of Florida, Georgia, and the District of Columbia, which have the highest per-capita percentage of identity theft refund fraud in the country.  The IRS issued nearly 3.5 million IP PINs to taxpayers last year, up from 770,000 in 2013. 


In 2017, the Federal Trade Commission received more than 82,000 complaints related to tax-refund fraud.  Fraudsters often target vulnerable older Americans.  In 2010, for instance, an estimated 76,000 seniors were victims of identity theft refund fraud.  Those who have been defrauded often wait months—even years—to receive the refunds to which they are legally entitled.