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US Accountants Make Anti-Tax Fraud Suggestions

Monday, 06 May 2013   (0 Comments)
Posted by: Author: Mike Godfrey
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Source: Mike Godfrey (, Washington)

On May 1, the American Institute of Certified Public Accountants (AICPA) provided testimony at the Internal Revenue Service (IRS) Oversight Board Forum on its suggestions about how to curb United States tax identity theft and fraud.

"Some actions that we believe would reduce the threat of identity theft would require legislative or regulatory changes," Jeffrey A. Porter, chair of the AICPA’s Tax Executive Committee, told the Oversight Board.

He said the IRS's proposed regulations authorizing filers of certain information returns to voluntarily truncate a taxpayer's identifying number is a "positive step towards protecting the privacy and security of personal information." The AICPA is pleased that the proposed regulations would make the truncation program permanent, because it has supported that for several years.

In addition, Porter suggested that the truncation program should be extended to permit truncated Social Security numbers on all types of tax forms and returns provided to a taxpayer. That would require a change in the law that AICPA has already recommended to Congress.

"A fundamental tax administration goal for combating fraud," Porter noted, "is establishing one point of contact within the IRS for prompt resolution of identity theft cases," as called for by former IRS Commissioner Douglas Shulman and National Taxpayer Advocate Nina Olson. Currently, 21 units exist within the IRS to help victims of identity theft.

Porter also emphasized that the IRS "should be provided with the proper resources to fund its mission, since the fight against identity theft fraud is taking a toll on IRS resources."

While praising the expansion of the IRS Law Enforcement Assistance Program to help state and local law enforcement officials obtain tax return data vital to investigating identity theft cases, and the continuing emphasis by the IRS on criminal investigations, he stressed that increased staffing and training are key components of the fight against identity theft.

"We believe the IRS should continue to increase the level of staffing dedicated to identity theft cases and improve its training of agency employees to ensure the proper response and assistance for identity theft victims," he confirmed.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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