WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Senate Finance Committee, today called on the Internal Revenue Service (IRS) to work with the Office of Personnel Management (OPM) to protect federal employees from tax-related identity theft following a pair of security breaches of OPM’s personnel database that exposed the personal information of millions of current and retired federal employees.

“As you know, filing and claiming a false return is startlingly easy, with scammers needing only a Social Security number (SSN) and a name to file and claim a false return,” Sen. Warner wrote in a letter to IRS Commissioner John Koskinen today. “There have already been reports that the credentials and identities of government breach victims are appearing for sale online to potential identity thieves. I am concerned that federal employees’ personal information could be used by scammers to fraudulently file a tax return next tax season.”

Continued Warner, “I ask that you do everything in your power to protect the millions of current and former federal employees who had their sensitive personal information exposed by the hack of the OPM database.”

To that end, Sen. Warner offered several possible ways that the IRS could coordinate with OPM to ensure that federal employees’ Social Security numbers aren’t used to file fraudulent tax returns, including increased use of the Identity Protection Personal Identification Number (IP PIN) program. An IP PIN is a six-digit number assigned to eligible taxpayers that helps prevent the misuse of Social Security numbers on fraudulent federal income tax returns. Once an IP PIN is assigned to a taxpayer, that IP PIN must be used on all federal tax returns filed in this and following tax years. If a return is filed without an IP PIN or with an incorrect PIN, the IRS will automatically reject the return.

About 2.9 million incidents of tax-related identity theft occurred in 2013 – up from nearly 1.8 million in 2012, according to a report from the U.S. Treasury Inspector General for Tax Administration. The IRS estimated it paid out $5.8 billion in fraudulent tax refunds in 2013 because of identity theft. Sen. Warner has repeatedly pressed the IRS on its efforts to address and prevent instances of this fraud due to identity theft. He has also provided a variety of useful resources and online form on his Senate website for Virginians who have been victims of tax ID theft to contact his office for assistance.

Sen. Warner has also introduced the Social Security Identity Defense Act of 2015 with Sens. Ron Johnson (R-WI) and Kelly Ayotte (R-NH) to require the Internal Revenue Service to notify potential victims of identity theft, something the agency has not always done in the past.

The full text of today’s letter is below.

June 23, 2015

The Honorable John Koskinen

Commissioner

Internal Revenue Service

1111 Constitution Avenue NW

Washington, D.C. 20224

Dear Commissioner Koskinen:

Last week’s data breach of the Office of Personnel Management’s (OPM) system has impacted thousands of current and former federal employees living in the state of Virginia.

As you know, filing and claiming a false return is startlingly easy, with scammers needing only a Social Security number (SSN) and a name to file and claim a false return.  There have already been reports that the credentials and identities of government breach victims are appearing for sale online to potential identity thieves. I am concerned that federal employees’ personal information could be used by scammers to fraudulently file a tax return next tax season.

I ask that you do everything in your power to protect the millions of current and former federal employees who had their sensitive personal information exposed by the hack of the OPM database. To that end, I request that you coordinate with OPM to prevent the victims of the breach from also becoming victims of tax-related identity theft. 

Some ways that you may be able to help, include, but are not limited to:

1.Work with OPM to proactively notify federal workers that they meet the criteria to receive an IP PIN by completing IRS Form 14039, Identity Theft Affidavit. The taxpayer will be able to use the IP PIN, a unique six digit authentication number, when they file their tax return next tax season.

2.Prominently post information on the banner of your website about the availability of the IP PIN program.

3. Include additional filters next tax season that identify potentially fraudulent returns, and apply careful scrutiny to refunds claimed by victims of the OPM breach.

I look forward to a response indicating how the IRS can work with OPM to protect the tax information of the federal workforce. Thank you.

Sincerely,

Mark R. Warner

cc: Hon. Katherine Archuleta, Director, Office of Personnel Management