Legislation aims to crack down on tax return fraud

U.S. Senator Bill Nelson (D - FL) has introduced the Identity Theft and Tax Fraud Prevention Act of 2013 to Congress. Sen. Nelson held a hearing in Washington to discuss the tax refund fraud epidemic Wednesday. Nelson wants to lengthen jail time for tax-related identity theft convictions.

The bill also calls on the IRS to return refunds to victims within 90 days.

During the hearing, the senator explained that this type of fraud is one of the fastest growing crimes.

"We are losing over $5 billion each year to the crime and now the problem is getting worse," he said.

Roger Hovatter, of Tampa, understands the urgency. He is a victim of tax refund fraud and says he wouldn't wish it on his worst enemy.

"We spent a whole day over at the IRS building sitting there waiting just to talk to somebody," Hovatter said.

Someone got Hovatter's Social Security number and filed for his 2011 tax refund before he did. It took almost an entire year of paperwork, phone calls, and headaches to see a dime. Hovatter finally got his 2011 refund this past January. The 60-year-old plumber is still left with a hopeless feeling.

"I felt like there was nothing I could say or nothing I could do," Hovatter said. "I couldn't get answers."

Tampa Police Detective Sal Augeri testified at Wednesday's hearing of the U.S. Senate Special Committee on Aging. Augeri is a vocal crime fighter against the epidemic that has hit Tampa harder than any other city. But the detectives says cooperation between the IRS and local law enforcement in investigating these crimes is better than ever.

"Sources on the street have told me of the increased police effort and that it's more difficult to get returns back from the U.S. government," Augeri told the panel.

President Barack Obama's 2014 budget proposal includes measures to slow down refund fraud, for example, removing Social Security numbers from W2 forms.

Hovatter is glad lawmakers are talking about the crime. But after losing his job to the recession, his home to foreclosure, then his identity to criminals, he's ready for more than just talk.

"I really think somebody needs to step up and take some action on this," he said.

Tax refund fraud victims are frustrated that every time they call the IRS, they have to re-explain their situation to a different IRS employee who has no knowledge of their case. The bill would require that ID theft victims have a single point of contact at the IRS, who handles the case from start to finish.