Leslie Book

About Leslie Book

Professor Book is a Professor of Law at the Villanova University Charles Widger School of Law.

Proposed Regulations Narrow Ability of Private Attorneys to Participate on Behalf of IRS in Exams

A few years ago we discussed litigation involving Microsoft (see, eg., Keith’s Enforcing the Summons Against Microsoft), which implicated Treasury regulations that allowed private lawyers to participate in exams. While the litigation did not strike down that practice, it was heavily criticized, and Treasury now proposes to scale back the practice significantly.

Last week Treasury has proposed to “significantly narrow the scope of the current regulations by excluding non-government attorneys from receiving summoned books, papers, records, or other data or from participating in the interview of a witness summoned by the IRS to provide testimony under oath, with a limited exception.”

The exception relates to lawyers who have expertise in issues other than federal tax law, such as state, local or other countries’ tax laws, or in other substantive areas, like patent law. The exception does not extent to nonsubstantive specialized knowledge (like litigation skills).

Treasury regulations still permit other outside specialists like economists to “receive and review summoned information and fully participate in the summons interview, including questioning witnesses.” The proposed regs also allow for lawyers who are not acting as lawyers but who are performing services associated with outside permitted specialists to participate.

The proposed regs attempt to restrike the balance between the need for outside assistance to help administer the tax laws with the “perceived risk that the IRS may not be able to maintain full control over the actions of a non-government attorney hired by the IRS when such an attorney, with the limited exception described below, questions witnesses.”

Perhaps the rebalancing of these interests will inspire a fresh look at the private debt collection issue, an area that likewise has raised questions about risks associated with non-government employees performing essential IRS functions.

4/3 Update: Title Changed to clarify we are talking about IRS limitations!

Pecker Buys Procedurally Taxing For Undisclosed Sum

David Pecker, whose company owns the National Enquirer, purchased all rights to the name and likeness and prior posts of Procedurally Taxing for an undisclosed sum. Pecker, whose National Enquirer has been in the news of late due to its cozy relationship with President Trump, has long felt the need to enter the nascent world of legal blogging, especially tax, with its cross over to and connection with the world of entertainment.

In commenting on the purchase, Pecker noted that just in the last few weeks we have seen Cardi B talk about tax policy, rapper DMX get sentenced to jail for tax evasion, an innocent taxpayer sue Howard Stern and the IRS for an employee talking about her tax account on the shock jock’s radio show, and John Oliver sing the praises of tax exemptions as he discusses prosperity gospel.

read more...

Noting the extensive reach that PT has in the bar, the bench and in government, Pecker hopes to leverage his company’s marketing and publicity to expand the blog’s footprint.

“Tax is everywhere,” said Pecker. “Outlets like Procedurally Taxing do not have a clue about the real world.”

While we are working out the final details, it appears that Keith, Stephen, and I, the founding bloggers, will remain affiliated with the blog in some capacity, though it is expected that we will significantly reduce time spent on the blog to allow well known celebrity authors to post.

The first post, due to be published Monday is entitled “Frequent Contributor Carl Smith Abducted by Aliens Claiming to Know Precise Constitutional Status of Tax Court.” Written by Fogg’s Harvard Law School colleague Steve Shay, who specializes in international and intergalactic transactions, the post hopes to explore issues that have long troubled not only the tax bar but also the public at large.

Pecker has released Monday’s post in preview form to a number of tax celebrities. Frank Agostino commented:  “The aliens have made a Graev mistake.  There is no evidence that the initial determination to abduct was personally approved in writing by the immediate supervisor of the alien making the abduction.  I plan to appeal this matter to the Court of Appeals for the Milky Way Circuit.  Or, at least go out and buy a Milky Way bar.”

Nina Olson thought:  “Carl Smith’s abduction no doubt violates a number of provisions of the Taxpayer Bill of Rights that I recently got Congress to incorporate into section 7803.  I won’t help Carl, but I will closely monitor any litigation in this area.”

Tax Court Chief Judge L. Paige Marvel expressed surprise that PT was aware of the abduction. “Information about the abduction,” she said, “is contained within the Tax Court files of a case Smith brought, but the information is not available on line.  To get this information, someone had to go to the Tax Court Public Files Office in D.C. or pay 50 cents a page for it to get it mailed out.  Who would do that?”

Pat Smith of Ivins Philips argued that Carl Smith’s abduction was invalid as a violation of the Administrative Procedure Act and looked forward to any court case that might overcome the limits of the Galactic Anti-Abduction Injunction Act.”

President Trump tweeted that “Regardless, the Trump campaign and Trump Administration did not speak to any of the aliens who abducted Smith.  There was NO COLLUSION.  Covfefe.”

Hillary Clinton noted that Carl Smith was a resident of Manhattan, a locale that voted overwhelmingly for her in 2016.  “Obviously, the aliens wanted someone smarter to probe.”

Tax Court Conference Ends By Looking to the Future

The last panel at the Tax Court Judicial Conference was a look to the future, considering current and future issues that could affect the way the court does business. The panel, moderated by Chief Judge Marvel, included the Chief Justice of the Tax Court of Canada, Miriam Fisher of Latham & Watkins, National Taxpayer Advocate Nina Olson, and Drita Tonuzi, Deputy Chief Counsel.

One indication of a successful panel is the sense that you both learned a lot and also wanted the panelists to keep going. The 80-minute panel flagged a number of issues (like possible new and revised jurisdiction, the court’s thorny constitutional status) and spent some time on a subset issues, including a tantalizingly brief discussion of EITC and its impact on the court, possible Tax Court rule changes, ways to increase efficiency and reduce litigation costs, the impact of globalization on Tax Court practice, and the possibility of expanding access to documents filed with the Court.

Access to filed Tax Court documents is an issue that seems to be front and center for the Court; as part of the materials the Chief Judge referred to a blog post that our sometimes Forbes colleague Peter Reilly wrote called Tax Court IRS and Secret Law. That post, in a nutshell, heavily criticized current Tax Court practice when it comes to allowing nonparties access to court documents, stating that the “Tax Court is letting us down when it comes to electronic transparency.”

As a blogger, researcher and sometime advocate, I find that easy access to briefs in cases in district court and appellate courts is very helpful. Current Tax Court practice essentially limits e-access to documents to parties, and those who have the resources or friends to go the Tax Court in DC can go and make make copies.

The Chief Judge tried to move the discussion away from labels (it is fair to say that the Chief Judge is not a fan of procedures being called secret or stealth) and toward what she referred to as a “constructive dialogue” that would take into account both the public’s legitimate need to know and the privacy concerns around often sensitive personal information that is embedded in the mostly pro se docket that makes up the court’s basket of cases.

As part of an effort to move the conversation, the Chief Judge flagged some specific possible changes, including the following:

  • Expanding the types of documents that can be accessed electronically (like briefs, dispositive motions);
  • Limit e-access to cases where both parties are represented; and
  • Restrict e-access to certain types of people, including possibly those who register

In a question, Judge Buch raised the possibility of allowing e-access to documents that Counsel files, and Judge Leyden suggested the possibility of allowing parties to elect into allowing e-access. The Chief Justice of the Canadian Tax Court said that in the near future all documents in the Canadian Tax Court will be e-accessible, with that court responsible for redacting some personal information.

The dialogue that Chief Judge Marvel encourages is welcome. So was some of the clarifying information at the start of the presentation, including reminders of the pro se nature of the Tax Court and that PACER limits access to Social Security and immigration cases, cases that like tax cases are embedded with lots of sensitive information. My sense is though that the Tax Court judges recognize that the balance is shifting on this issue, the balance between transparency and privacy is not currently correctly calibrated, and that Counsel’s access to all briefs and filings gives it a leg up over the private bar that could be remedied without major harm. Judge Buch’s suggestion to allow access to Counsel filings would be an easy start, though I think it is not too much of a leap to allow access to classes of documents like briefs and dispositive motions in all cases where there is counsel.

Now, when it comes to transparency and consistency for Tax Court orders….well that is another story and perhaps the subject of a future panel.

Tax Court Judicial Conference Kicks Off Tonight: A Brief Take On Exotic Jurisdiction

Keith and I are both in Chicago to attend the Tax Court’s Judicial Conference. I am looking forward to seeing some old friends and colleagues, attending panels on a range of topics, and speaking on a panel with Keith, Nina Olson and Judge Peter Panuthos about the role that taxpayer rights play in representing taxpayers.

One of the panels I will attend is called “A Trip Through the Tax Court’s Exotic Jurisdiction.” I am especially looking forward to that, as I have been writing lately about the role that administrative law generally and the APA in particular plays in cases that are not traditional deficiency cases. Last week in updating the Saltzman Book treatise as part of our regular three times a year update I have revisited Kasper v Commissioner, a case we on PT discussed briefly when it came out and which is one of the more interesting procedure cases of the past year. As readers may recall, that case held that the standard of review in whistleblower cases is arbitrary and capricious and the scope of that review is limited to the administrative record.

In reaching its conclusion, Kasper revisits and places in context the Tax Court’s approach in other cases that are not traditional deficiency cases. Tax procedure can be complex enough when dealing with straightforward deficiency cases (consider for example the Borenstein case that PT discussed which Keith and Georgia State Tax Clinic Director Ted Afield have just filed an amicus brief that looks at an odd situation when a taxpayer filed an original return with a refund claim just prior to filing a petition). Congress over the past few decades has added to the Tax Court’s basket a number of other types of cases, including the whistleblower provisions Kasper addressed, CDP which 20 years on still presents a steady stream of tough issues (see Lavar Taylor’s latest guest posts on alter egos) and the rules relating to employment tax determinations under Section 7436.

All of this is preface for a recent Program Manager Technical Advice  that discusses the limits of Section 7436. Readers may recall that 7436 provides that the Tax Court has jurisdiction to determine in employment tax audits whether someone is properly classified as an employee or whether the employer is entitled to so-called 530 relief (essentially a safe harbor allowing escape from liability if certain conditions are satisfied). There have been a bunch of interesting procedural issues spinning off 7436; for example I discussed last year the Tax Court order that concluded that Section 7436 did not provide it jurisdiction to determine whether an S corp’s wages were artificially low:

Section 7436(a)(1) only confers jurisdiction upon this Court to determine the “correct and the proper amount of employment tax” when respondent makes a worker classification determination, not when respondent concludes that petitioner underreported reasonable wage compensation, as is the case here.

The PMTA involves a similar legal issue in a different context. In the PMTA, the IRS considered a non-US corporate taxpayer with a US Sub. The overseas parent sent its employees into the US to provide computer and engineering services to US clients. The overseas parent paid the employees for the engineering and computer work they did in the US. The overseas parent did not withhold on the payments it made to its employees for the work those employees performed in the US, essentially arguing that it was not engaged in business in the US and was able to rely on statutory and regulatory exceptions on overseas employers who have temporary employees working in the US and who earn limited salaries (while some treaties have specific rules on this the PMTA indicates that the parent resided in a jurisdiction that did not have a treaty with the US).

IRS examined and concluded that the parent should have withheld on the wages that were paid to its employees. The PMTA concludes that its conclusion regarding the withholding liability would not be a determination under 7436 and the parent was not entitled to go to Tax Court:

[T]here is no dispute that the [nonresident alien(NRA) parent corp] performing computer and engineering services on behalf of the foreign corporation are employees, that the services were performed within the United States, and that such NRAs received compensation from the foreign corporation for those services. Rather, the foreign corporation is asserting that it is not liable for income tax withholding because it was not engaged in a trade or business within the United States. This argument is not based on a position that the NRAs are not employees. Thus, there is no actual controversy over the worker classification of the NRAs. Rather, the foreign corporation’s disagreement is premised on the position that the NRAs are employees, but that because the employees worked for a foreign corporation while temporarily in the United States and were compensated less than a threshold amount the foreign corporation did not have a trade or business within the United States

Conclusion

Of course the IRS does not get to decide the contours of the Tax Court’s jurisdiction but as the PMTA discusses IRS employment tax audits can raise issues not squarely within the language of 7436. Absent Tax Court jurisdiction, taxpayers can get court review in the federal district courts or the Court of Federal Claims. That comes after assessment, and some payment of the tax, triggering other issues and perhaps more litigation costs.

Government Files Brief in Chamber of Commerce Case/Supreme Court Resolves Circuit Split on Tax Obstruction Statute

Today’s post will bring readers up tp date on two significant developments, the first involving the heavily watched Chamber of Commerce case in the Fifth Circuit and the other a Supreme Court opinion in Marinello v US that resolved a circuit split that concerned an important criminal tax issue.

Chamber of Commerce Appeal

One of the more significant tax procedure cases of last year was Chamber of Commerce v IRS, where a district court in Texas invalidated Treasury’s temporary regulation that attempted to put a stop to corporate inversions.

The government appealed the decision to the Fifth Circuit, and this week the government filed its brief spelling out why the circuit court should reverse. In addition to arguing that the district court erred in finding that the plaintiff had standing, the government urges the Fifth Circuit to find that the Anti-Injunction Act bars a pre-enforcement challenge to the regulations, and argues that Section 7805 allows it to issue prospective temporary regs without notice and comment.

Treasury’s view on temporary regulations I find strained, as I discuss in the latest update to Chapter 3 Saltzman and Book IRS Practice and Procedure, but I suspect that the AIA may allow the Fifth Circuit to sidestep that issue.

Here is the summary of the government AIA argument from its brief:

But even if plaintiffs have standing, their suit is barred by the Anti-Injunction Act and the tax exception to the Declaratory Judgment Act, which ban the issuance of declaratory and injunctive relief against the assessment or collection of federal taxes. Plaintiffs cannot have it both ways: their contention that they have standing because their members are threatened with increased tax liabilities would necessarily mean that their suit falls squarely within the AIA’s prohibition against suits “for the purpose of restraining the assessment or collection of any tax.” The District Court erred in its overly restrictive construction of the AIA. The AIA’s prohibition on injunctive relief applies broadly, reaching not only actions directly involving assessment or collection, but also those that might affect assessment or collection indirectly. The AIA clearly bars attempts, such as this one, to enjoin a Treasury Regulation affecting the existence or amount of a tax liability.

The AIA has long been an important barrier walling off IRS/Treasury guidance from pre-enforcement challenges. As we have discussed on PT, with cases like Direct Marketing, which considered the reach of an analogous statute that bars challenges to state tax statutes, advocates have been probing for ways to get courts to consider the procedural and substantive validity of rules such as in this case.

The brief discusses and distinguishes Direct Marketing. No doubt the Chamber of Commerce disagrees. We will keep an eye on this case.

Supreme Court Resolves Split in Circuits on Obstruction Statute

In Marinello v US, the Supreme Court resolved a circuit split involving Section 7212(a),  involving the tax specific obstruction statute. The Court held that a conviction under the statute requires that there be an ongoing investigation of the defendant, with the defendant both knew about and intended to obstruct. The opinion leaves open, however, the possibility for a conviction if the proceeding was reasonably foreseeable by the defendant.

In addition to resolving the split, the opinion provides a nice window into competing strands of statutory interpretation. The dissent, penned by Justice Thomas and joined by Justice Alito, relied on a more literal approach. The statute prohibits “corruptly . . . obstruct[ing] or imped[ing], or endeavor[ing] to obstruct or impede, the due administration of this title.” Noting that the title at issue was Title 26, and that encompasses all aspects of the tax code, the dissent, as a few other circuits, would have not limited the statute’s application to situations when there is awareness of (or reason to be aware of) the investigation.

As support for that view, the dissent looks to the Direct Marketing discussion of tax administration, which identified the four components of tax administration as involving “information gathering, assessment, levy, and collection.”

‘[D]ue administration of this Title’ refers to the entire process of taxation, from gathering information to assessing tax liabilities to collecting and levying taxes.

The majority opinion leans on context, looking to related interpretations of the general obstruction statute, a concern that the government’s approach leaves too much discretion to prosecutors and the potential use of the tax obstruction statute to encompass more run of the mill tax misdemeanors.

 

Chamber of Commerce Files Amicus in Facebook Case: In Praise of Appeals

The Chamber of Commerce, no stranger to cases challenging fundamental issues in tax procedure, has filed an amicus brief in the case I discussed earlier this week where Facebook is suing IRS due to the agency denying Facebook access to Appeals.

The amicus largely repeats the substantive arguments Facebook has made though emphasizes 1) the importance that taxpayers place on ensuring access to a fair and impartial Appeals function and 2) the cost to the system if IRS is allowed to bypass Appeals when it in its unreviewable discretion believes that decision is consistent with “sound tax administration.”

The brief highlights how taxpayers value privacy (uhh a privacy argument  in a case involving Facebook?) and unlike cases in federal court, Appeals proceedings are outside the public eye. The brief also discusses how Exam is kept in check by Appeals’ mission to settle cases fairly and on the hazards of litigation, a balancing act that Exam does not apply in evaluating possible resolutions:

Taxpayers no longer can feel confident that they will have access to an independent forum to serve as a safety valve on an overzealous examination team. Taxpayers and examination teams alike may focus more energy on convincing IRS Counsel whether it is in the interests of “sound tax administration” to permit access to IRS Appeals at the expense of devoting effort to developing the merits of the issues in the case. The effects of Revenue Procedure 2016-22 will be felt far beyond those cases in which access to IRS Appeals is actually denied.

The brief also emphasizes the Chamber’s view that IRS is trying to carve out a different path and extend dreaded tax exceptionalism:

The IRS continues to resist application of the APA, arguing in this case that “Congress has provided specific rules for judicial review of tax determinations; those specific rules control over the more general rules for judicial review embodied in the APA.”

***

Whatever the underlying merits of the IRS Appeals process, and Facebook’s claims in this case, it is nonetheless astonishing for the IRS to argue in its Motion to Dismiss that it has the authority to deny taxpayers access to an independent administrative forum in an arbitrary and capricious manner, and that taxpayers that are adversely impacted by those actions have absolutely no judicial recourse. Whatever one can say about the goals of “sound tax administration,” a system in which the IRS is above the law—the very same law that applies to all administrative agencies of the federal government—is not one that the Supreme Court has approved and is not one that this Court should approve.

The Chamber brief hangs its hat in part on the argument that the courts have been pushing back on tax exceptionalism. That to me is atmpospherically relevant, but it proves too much: administering the tax system is different from say regulating noxious emissions or ensuring airplane safety.  The devil is in the details of the particular procedures or path IRS believes warrant a separate approach.

IRS has not helped itself in this case though by promulgating essentially a standardless standard that allows Counsel to bypass Appeals that as the brief indicates allows Counsel to “mask illegitmate reasons for denying access to Appeals.” Even if in this case the reason for cutting off access to Appeals is legitimate, the lack of guidance on what should inform or explain that bypass decision generates a perception of illegitimacy, and that is not sound tax administration.

 

Facebook Asserts that TBOR Mandates Right to Appeals

Facebook and IRS are squaring off in Tax Court over billions in taxes relating to its transfer of intangible assets to Irish subsidiaries. That fight has spawned major procedural side skirmishes in a California federal district court, including battles over privilege and IRS’s refusal to allow the social media giant access to Appeals.

Perhaps in a later post I will return to the interesting privilege battles. This post is about the important legal issues in Facebook’s challenge to the IRS’s rules that allow Counsel discretion to eliminate a taxpayer’s right to Appeals.

read more...

In its complaint that it filed last November, Facebook seeks a declaratory judgment that IRS unlawfully issued a 2016 revenue procedure that unlawfully denied its access to an administrative forum. IRS began its audit of Facebook in 2011, and Facebook repeatedly sought Appeals consideration. After Facebook declined to extend the SOL on assessment for a sixth time because IRS did not agree to provide a timetable for Appeals consideration, IRS issued its stat notice. Facebook petitioned to Tax Court and renewed its request for Appeals consideration. IRS refused, referring to the 2016 revenue procedure that allowed Counsel to bypass its right to Appeals review in its transfer pricing deficiency case in the interest of “sound tax administration.”

The case tees up Appeals role and whether taxpayers have the right to Appeals’ consideration in light of developments over the last two decades. Prior to 1998, it was generally accepted that the right to Appeals was discretionary, and the product of IRS procedural rules that IRS was not required to follow. The pre-1998 Code barely acknowledged Appeals’ role in tax administration.   When we rewrote the Saltzman and Book IRS Practice and Procedure chapter on Appeals (currently slated for another refresh this summer) we discuss how the 1998 IRS Restructuring and Reform Act of 1998 (RRA 98) changed that through a host of Code provisions that directly mention Appeals and an off Code but still statutory directive to IRS to ensure an independent Appeals function. In addition, the 2015 codification of TBOR in Section 7803(a)(3)(E) requires that the Commissioner ensure that IRS employees be familiar with and act in accord with taxpayer rights, including the “right to appeal a decision of the Internal Revenue Service in an independent forum.”

In its response to government’s motion to dismiss Facebook argues that RRA 98 and Section 7803(a)(3)(E), taken together, mean that IRS is not free to cut off Appeals’ rights as it has done via the revenue procedure (and as an aside in the IRM when it allows for bypassing Appeals in cases designated for litigation). In making its argument, Facebook claims that TBOR itself creates a substantive right. In response to the IRS view that Section 7803(a)(3)(E) does not directly provide a remedy for violations, Facebook argues that when Congress explicitly directs agency action (as it argues was done with Appeals consideration), an agency cannot dismiss that as meaningless. In addition, Facebook claims that Section 7803(a)(3)(E) justifies the court ordering a remedy for agency violations, through Supreme Court precedent that courts should not read language in statutes as “mere surplusage.”  This argument syncs with our recent guest post on the subject.

The government makes a number of arguments in response, including that TBOR merely expresses general principles and does not create binding rights, the TBOR reference to an independent forum refers to judicial and not administrative review, and that in any event Facebook does not have Article III or statutory standing to bring the litigation.

The matter is scheduled for a hearing in April. We will keep a close eye on this litigation.

Even apart from this case, the broader issue of the role of taxpayer rights in tax procedure is an issue that is picking up steam and is likely to become one of the major issues in tax procedure in the next few years. On PT Christina Thompson recently discussed Alice Abreu and Richard Greenstein’s article on taxpayer rights (which flags some of the issues in this litigation). In addition, Keith and I will be on a panel at the Tax Court judicial conference in Chicago later this month that will consider taxpayer rights, and in May Alice and I will be moderating two panels at the ABA Tax Section Individual and Family Tax Committee and Pro Bono and Tax Clinics Committee that will consider rights in controversies and include more on the Facebook litigation. One of the main promoters of taxpayer rights in tax administration, Nina Olson, is convening the third International Taxpayer Rights Conference in May.

Boo Boo Busted: Alabama Man Sentenced to Thirty Years for Role in ID Theft Tax Refund Fraud Schemes

Earlier this month, the Department of Justice announced in a press release that William Gosha III, who went by the nickname Boo Boo, was sentenced to 30 years for his role as mastermind in a brazen identity theft ring that resulted in the filing over 8,800 fake tax returns and the receipt of over $9 million in bogus refunds.

The case stands out both for its scope and impact. Co-conspirators included an employee of a hospital in Fort Benning, Georgia, who stole US soldiers’ identities and Social Security numbers. The soldiers’ information enabled Boo Boo and co-conspirators to file fake returns claiming phony refunds, including for soldiers who were stationed in Afghanistan.

The scheme also reached other government agencies, as co-conspirators included an employee of the Georgia Department of Public Health and Georgia Department of Human Services. Gosha also arranged to steal identities from inmates at a local prison and conspired with a US Postal Service employee to get physical addresses for refunds when financial institutions limited his ability to get refunds directly deposited in bank accounts.

Thirty years seems on the high end for sentencing for a crime such as this though I doubt that many schemes have had this deep a reach with other government agencies. In addition, the victim impact statements, including a statement from a parent of a soldier whose identity was stolen and who heard from the IRS while her son was in Afghanistan, must have had a major influence on the sentence:

This news was devastating to think that my [] 19-year-old son[,] who was defending the very freedom this country stands [for] [,] was wronged by one of those people [he] was willing to die for. My whole family could not believe what was happening. We now had to worry about this terrible act by one of our own. As I tried my best to keep composed and handle all of the gruesome mounds of paperwork to get this straightened out with the IRS, [my son] was then denied his tax refund [as result of this scheme]. This created a financial hardship on [him]. We were too afraid to tell [him] while he was deployed because we did not want to worry him and we wanted him to focus only on getting home alive and not have to worry about such an atrocious act by someone who did not even know

Last month IRS announced that in 2017 it has been very successful in cutting back on identity theft based refund fraud. Key indicators show that IRS has turned the tide in the battle:

  • In 2017, the IRS received 242,000 reports from taxpayers compared to 401,000 in 2016 – a 40 percent decline. This was the second year in a row this number fell, dropping from the 677,000 victim reports in 2015. Overall, the number of identity theft victims has fallen nearly 65 percent between 2015 and 2017.
  • The number of tax returns with confirmed identity theft declined to 597,000 in 2017, compared to 883,000 in 2016 – a 32 percent decline. The amount of refunds protected from those fraudulent returns was $6 billion in 2017, compared to $6.4 billion in 2016. In 2015, there were 1.4 million confirmed identity theft returns totaling $8.7 billion in refunds protected. Overall during the 2015-2017 period, the number of confirmed identity theft tax returns fell by 57 percent with more than $20 billion in taxpayer refunds being protected.

As this DOJ Press release shows, identity theft is not a victimless crime. While IRS and its private sector partners are making major headway the problem is still plaguing hundreds of thousands of people, causing direct costs on them and on all of us in the form of significant IRS resources dedicated to this fight.