Johnson Introduces ITIN Reform Act

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Washington, September 21, 2012 | comments

Today, U.S. Congressman Sam Johnson (TX-03) introduced the ITIN (Individual Taxpayer Identification Number) Reform Act in light of shocking findings from a recent Tax Inspector General for Tax Administration (TIGTA) report.  This follows Johnson’s call in August for the resignation of IRS Commissioner Douglas Shulman after the report revealed IRS actions that put billions of taxpayer dollars at risk.

The IRS issues ITINs to individuals ineligible for Social Security numbers.  The IG report exposed deplorable management of the IRS’s ITIN application process in which IRS managers were encouraging employees to ignore questionable applications and blatant fraud for the sake of fast-tracking ITIN approvals. 

Originally put in place to allow undocumented workers to claim income and pay taxes in the U.S., the ITIN process has become a ticket for illegal immigrants to get cash benefits from the federal government through, such as through the $1000 refundable child tax credit. 

“It’s time to hold the IRS’s feet to the fire when it comes to protecting taxpayer dollars,” said Johnson.  “The IRS should be rooting out waste, fraud and abuse – not encouraging it.”

The ITIN Reform Act would put safeguards in place to prevent fraud in the ITIN application process and require the TIGTA to conduct an audit every two years to ensure the IRS is protecting tax dollars.

The Act would require ITIN applicants to provide original documentation establishing their identity and foreign status.  In addition, ITIN applicants would be required to appear in-person at an IRS office for initial on-site verification.  Currently, applicants can submit their applications by mail or through a third party.

“The IG’s report makes clear that the IRS simply cannot be trusted to protect taxpayer dollars,” said Johnson.  “This bill will go a long way towards putting in place the necessary safeguards that Americans want, need and deserve.”

Johnson’s floor remarks can be viewed here.

Remarks as prepared:

“Mr. Speaker, it’s time for Americans to know the truth about the abuse of their hard-earned taxpayer dollars… Especially at a time when the President is calling for tax increases.

The issue I’m talking about is IRS’s actions that put billions of taxpayer dollars at risk.  Currently, the IRS allows individuals without a social security number to get cash benefits – like the $1000 refundable child tax credit, which is costing American taxpayers billions of dollars – by obtaining an Individual Taxpayer Identification Number, or an ITIN. 

A recent government report revealed a shocking scandal within the IRS that encouraged employees to fast-track ITIN approval without regard to preventing fraud.  The ITIN has become a ticket to getting cash from Uncle Sam, and the IRS is aiding and abetting this fraud.  This is wrong!

That’s why I’m introducing the ITIN Reform Act – to hold the IRS’s feet to the fire with common-sense safeguards to better protect the American taxpayer.  I urge my colleagues to pass this bill now.”

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