Is the IRS ignoring certain victims of identity theft?

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MEMPHIS, Tenn. -- There's no short of tax related scams and identity theft in Memphis.

WREG has previously talked with customers of crooked tax preparers after returns were filed without their permission.

The News Channel 3 Investigators have also met victims whose identities were stolen outside of tax season, but didn't learn about the theft until trying to file their own tax return.

In recent years though, the IRS has cracked down on schemes targeting taxpayers.

However, at least one congressman is concerned the nation's tax collector isn't doing enough to protect victims of one type of identity theft.

"I think all of us can agree that victims need to know that they're victims."

That was just one of the comments made by Senator Dan Coats of Indiana, as he questioned IRS Commissioner John Koskinen at a recent hearing about why the agency doesn't notify all taxpayers when their social security number is stolen.

Coats was talking about what's called employment related identity theft.

It happens when an undocumented worker steals a social security number to get a job.

That social ends up on the worker's W-2, and eventually processed with his or her tax return.

"We learned the IRS identified 200,000 new cases of employment related identity theft last year and marked the victim's account, yet did not notify the victims." Coats explained.

He also said the IRS ignores notifications from the Social Security Administration and uses its own system to cross reference information.

Koskinen, meanwhile, pointed out the IRS currently sends out thousands of notices to taxpayers whose socials may have been compromised through its databases.

According to an IRS spokesperson, tax returns are now often flagged if there are potential problems related to possible identity theft.

IRS Assistance for Victims of ID Theft

However, Koskinen explained employer related identity theft is different.

"It's not the normal identity theft situation."

Koskinen said the cases are very limited, and while the social security number is stolen, and in some cases "borrowed" from another relative, the worker is using his or her own name and government issued Taxpayer Identification Number to file taxes.

While Koskinen didn't provide an exact answer on why the IRS wasn't notifying these victims, he said the agency is developing a plan to do so, and at the same time, not discourage the workers from paying taxes.

He said what the IRS is trying to determine is, "what's the most effective way to deal with this without necessarily having people not to file their taxes?"

Memphis attorney Monica Justus, who also works in Texas, has defended clients accused of stealing social security numbers.

She said if anyone is turning a blind eye to the situation, it's employers.

"There's a number of things that we see happen when the employer really, actually knows the social is not the social that belongs to the worker."

Justus said workers are told they must have a social to get on the payroll no matter what.

She said some even buy them, thinking that's okay.

"Many times, yes, I know it's not my social, but I bought it so they think there's some legality to the fact that they actually purchased the social security number."

Justus agreed though, victims deserve to know if their social security number has been stolen.

She said however, there should be a better way for workers to get the documents they need to legally work and file taxes.

The IRS said it hopes to start notifying victims of employer related identity theft by January 2017.

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