Caribbean citizens who have joined the islamic extremist requests you made a comment people have gone from the caribbean. To syria. Can you give us a little bit more where they are coming from what you think they are doing, and whether you have seen any indication they are trying to come back . Like in our own country there is a small number reportedly that have gone radicalized one way or another in the west. Larger numbers in western europe. I would suspect they will get good at, while they are in syria, killing. Pick up job skills in terms of explosives and beheadings. Everyone is concerned if they come home. One would expect they would come back at least as radicalized as they were with couldnt a job skills they picked up in the fight. We have any indication of any scheme to attack the u. S. . No. But the smaller countries, as i say, we take for granted in the u. S. That we have a functioning legal Justice System and fbi. Layers of clean police men and women. A lot of these countries do not have that. If these people return, or when they return, where we can monitor them and check them. These countries im talking about, trinidad, jamaica come a surname jamaica, sir uriname. Small numbers. Some of them get recruited were radicalized off the websites. There are a couple of radical mosques in the region. Some of the places i have just mentioned. 100 does not seem like a lot. The little countries they come from have a total inability to deal with it. That is their concern. The countries are mainly the ones you are jamaica, trinidad and tobago. Surinamee. I think that is all. According to the irs fake the Senate Finance committee examined some of the fraudulent activity used against taxpayers this season. This hearing is 1. 5 hours. Welcome. The committee will come to order. The Committee Meets to talk about growing criminal activity that is threatening taxpayers across the country. These criminal acts are perpetrated by thieves hiding behind telephone lines and computers, praying on honest taxpayers and robbing them of tens of billions of dollars a year. We are here to hear about federal and state officials on the fight to catch these crooks and protect taxpayers. First, i would you talk about one case in particular. One very large number, by the way. This is a hearing that is long overdue as far as i am concerned. On this committee, we often talk in terms of hundreds of millions, billions, or even trillions of dollars. Some joke about a number being referred to as budget dust, even if that number has nine or 10 zeros behind it. Let me tell you about a number that is stunning, 15,800. That 15,800 saves hard work sacrifice, and honest living. That is saved for the down payment of a new house for a growing family. That is 15,800 in savings that has been wiped away by criminals who use fear, confusion, and intimidation as their weapons. This is a story of a family from taylorsville, utah. I would like to play a clip of a utah affiliate who tells their story. These crooks have gotten a lot more sophisticated and a lot more aggressive. This family learned that the hard way, one week ago. Brenda and Melissa Dagen are excited for christmas but only have a few christmas presents under the tree. Melissa got a phone call saying she owed taxes from 2009 and was about to be arrested. Melissa i was like, what can i do to fix this . I cant be arrested. I have no one to watch my kids and they would not let me get off the phone. Anchor another scammer was calling her phone with the bogus caller id 911. Melissa was convinced they were on the way and withdrew 15,800 which he used to pay prepaid cards and gave the code numbers to the thieves. That money was gone before she realized she had been victimized. Melissa i have not been able to stop crying. I cannot eat. I am sick to my stomach. Embarrassed, just lost that all of this money we were trying to save for a down payment on a home because we need a bigger home to take care of three kids and my heart has been totally ripped open because of this. Anchor the story is too familiar to lieutenant doyle of the unified Police Department which is investigating dozens of these cases. Lieutenant they are demanding people pay and get Prepaid Debit Cards, and they are telling them they have outstanding warrants for the arrest. Anchor for the record, neither the irs or police collect payments over the phone. Melissa wishes she had known that one week ago and has a message for the people who did this. Alyssa i forgive you, but it is sick and wrong and i do not have they can live with themselves. I do not know how they can make phone calls and hurt people. Not any time of the year, but especially during christmas. Anchor melissas cousin has started a go fund me page where they can recoup some of those losses. Total strangers are giving whatever they can to melissa and brendans fund to help the family recover. We have put a link to melissa and brendans go find me page on our website, goodforutah. Com. That is one family out of millions of that have been targeted and thousands victimized. This is one scam. Make no mistake, taxpayers across the country are facing Identity Theft in record numbers. Once again, we have to stop this. Taxpayers must be more aware of the risks and better protected from attack. These criminals must be found and brought to justice. We looked over to the testimony of eyewitnesses on todays panel. We will be hearing more about how to accomplish these goals. Let me turn the time over to senator wyden. Senator wyden thank you chairman. I appreciate the chance to talk and work on these issues in a bipartisan way. Since the days irs opened their doors, scam artists have been hatching up slick new ways of stealing taxpayer dollars from the treasury. What is knew is that the ripoff artists are now stealing americans identities and personally threatening them on an industrial scale while directly robbing them of their hard earned money. The fraudsters constantly dreaming up new tactics, and then they milk them for all they are worth before they start getting caught. Then it is lather, rinse, and reapeat. Onto the next scam and always one step ahead of the law. Today, the committee will examine several of the fraudsters latest strategies that are plaguing taxpayers. The one that is hitting oregonians hardest is the fake phone call demanding money or personal information on behalf of the irs. In fact, these calls were the number one Consumer Complaint registered with the Oregon Department of justice just last year. Not Everybody Knows that the irs simply does not cold call individuals making demands or threats. It is pretty clear from my vantage point, there is a lot more work to be done to defeat this scourge. Given the sophistication of this criminal activity, and the fact that a lot of it comes from overseas, this sure looks to me like an emerging type of organized crime. So the real question is, what is it going to take to root it out and get the bad actors on the sidelines . What is the role for more prosecutions, stronger deterrence, more cops on the beat . And what is the best way of getting the word out so taxpayers are not tricked into surrendering their life savings to some intimidating voice on the other end of the phone line . Even if our people managed to avoid the phone calls, you can bet that the crooks find other ways to profit. Tax Preparation Software has become the scammers new fast lane. They acquire data from the black market or hack into commercial databases, and then they filed false returns electronically. The victims might not find out until too late. There have been reports of this in 2015. We will hear some Software Vendors are not doing enough to prevent fraud. In my view, part of the challenge is getting the states internet tax services and irs on the same wavelength. They have to Work Together to make sure the criminals cannot just in a nimble fashion slide from one jurisdiction to the next, as they rip off more unsuspecting americans. So taxpayers may choose to avoid the software, but not even a paid tax preparer is guaranteed to be safe. In fact, many of them do not meet any standards for competence. There are far too many of these con artists out there who are willing and able to pray on the people who come through their doors. In some of the most offensive cases, they secretly falsify their victims returns to boost the refunds and then they pocket the difference. Once the tax season ends, the crooks disappear from storefronts they occupy, and there is no trace on where they have gone. A few states like mine have rules in place to help shield taxpayers from this kind of the ripoff. Most states do not. Senator cardin and i have introduced a Taxpayer Protection and prepare proficiency act at the beginning of this congress to give all americans the security they deserve. Our colleague, senator nelson, is also a leader on this issue of keeping taxpayers save from identity that and fraud. All of us wish, as i indicated to chairman hatch, to work on this in a bipartisan way. The bottom line, there is no end to the ingenuity of the con artist, so my hope is that we will get some fresh ideas for catching up to this wave of fraud and stopping. Obviously, it cannot come soon enough. We have a distinguished panel here today, especially pleased that the director of Consumer Outreach and education in the Oregon Attorneys General Office is here. Thank you to all eyewitnesses. We look for to working with you on a bipartisan way. Chairman our first witness is attorney general Caroline Cirillo of the tax division of the u. S. Department of justice. She was appointed attorney general of planning and policy of the tax division in january of this year. Prior to that, she was chair of the tax and Litigation Group in baltimore. We welcome you to the committee and look forward to hearing your testimony. Cirillo thank you. Members of the committee, thank you for the opportunity to appear but are you to discuss the department of justice effort to combat identity that and tax refund fraud. The department greatly appreciate the commitment that the committee has brought to this very important issue. Combating the theft of personal information to file fraudulent tax refund claims is a problem across the country. Your efforts to bring attention to this growing crime will help educate taxpayers about the importance of detecting and reporting Identity Theft and fraud. Todays hearing also sends a strong message that the government is determined to identify and prosecute individuals behind these schemes and in doing so, will bring all its resources to bear. The Department Tax division, which i have the privilege of meeting as acting assistant attorney general, has one purpose. To enforce the nations tax laws fully, fairly, and consistently through civil litigation and criminal prosecutions. Our close working relationships with irs criminal investigation, tigda, the fbi, the u. S. Postal service, and other federal state and local Law Enforcement continue to attend the government possibility to respond quickly, efficiently and forcefully to changing patterns of criminal conduct. Stolen identity, is an example of this type of challenge. In surf crimes, they filed a false refund claim and have the refunds of electronically deposited to a bank account or mailed to an address where the wrongdoer can access a check. Sirf crimes involve multiple vendors who have large flames of information. Sirf crimes hit vulnerable members of our society. These include, and are not limited to, the elderly, the hospitalized, students and members of our military deployed overseas. While the irs will make good on any refund due to the taxpayer there are inevitable burdens and delays while the matter is addressed. The victims often experience a profound sense of violation. Moreover, we are all victimized by loss in the u. S. Treasury. To this end, the tax division expedites the review procedures in sirf cases. The authority to initiate tax related jury investigation and to charge those involved in complete without prior authorization. The collaborative efforts of the tax division and the Law Enforcement partners have strengthened the response to the crime. Through december 31, 2014, they prosecuted over 1400 individuals and courts are imposing substantial sentences. To further leverage from its investigation, in february, the assistant attorney general created a sirf advisory board. The board works to develop and implement a National Strategy to ensure consistent and infected nationwide and prosecution of sirf crimes. For example, they conduct sessions for fraud analyst, they provide training and resources to prosecutors across the country. It works with u. S. Attorney offices to develop local task forces. These initiatives enable prosecutors and Law Enforcement agencies to Work Together to identify schemes and to pursue the most culpable offenders. While providing the irs with realtime information that can be used to improve its filters and stopped the issuance of fraudulent refunds. The prosecution of sirf crimes is a national priority, and together with our Law Enforcement partners, we will continue to look for the most effective ways to punish the offenders and bring this conduct to an end. Thank you again for this opportunity to provide the departments perspective on this issue. I look forward to answering any questions. Chairman thank you so much. Our next witness is timothy, the Deputy Inspector general at the treasury. Camas has served at the Inspection Service for over 23 years. He has a long career of having successfully investigated cases of domestic terrorism, bribery and fraud. We certainly welcome you and we look forward to taking your testimony at this time. Camas thank you for the opportunity to testify on the topic of the tax schemes and scams during the 2015 Filing Season. By raising Public Awareness about criminals efforts to swindle honest americans out of their money, we may provide the next person from becoming a victim, which is a very good thing. Each year, the irs compiles what it sees as the dirty dozen tax scams on its website. Many of these schemes take during the Filing Season as people repair returns or utilize the service of paid preparers. My Statement Today briefly outlines the top schemes and scams currently affecting taxpayers as they have proven to be surprisingly effective ways to steal money, in many cases before the victim realize they have been scammed. The first scams, the phone impersonation scam which landed on the top of the dirty dozen list. It is the largest and most recent impersonation scam we are aware of. It has claimed thousands of victims. Heres how it works. The intended victim receives an unsolicited phone call from a person claimed to be an irs agent. The caller uses a fake name and tells the victim a made up badge number. The callers may know the last four digits of the victims Social Security number. They say that if they fail to pay, they could lose their drivers license, or be arrested. I received one of these calls at my home on a saturday. Tigda has received many reports of these calls averaging between 9000 and 10,000 calls coming to my agency. As of march 9, two thousand 15 over 3000 individuals have been victimized by this by paying a total of 15. 5 million for an average of 5,000 per victim. The highest reported lost by one individual was a staggering 500,000. In one particularly sad story, a member of this committee forwarded a letter to us from a constituent whose close relatives suffered a tragic death after receiving harassing phone calls from this. We are reaching out to the media, irs, National Trade commission, and providing testimony to this committee it helps to eliminate this type of abuse and to prevent vulnerable individuals from becoming victimized. Anotehr scam involves the story the victim has won the lottery. This is a continuation of an old scam and starts with an email or telephone call out of the blue, declaring that the victim has want a lottery. In order to declare the winnings, they must first pay the tax to the irs. The lottery scam often, but not always, originates from outside of the United States. In the end, the victims pay the money, but they never received any lottery winnings. Just as serious as these scams the risk of taxpayer refund Identity Theft. The irs has made improvements in identification of Identity Theft returns before fraudulent tax refunds are released. Continued attention is needed to effectively combat this crime. For example, the irs still does not have timely access to thirdparty income and withholding information. Most of the thirdparty information is not received by the irs until well after the taxpayers begin filing returns. The deadline for most information returns with irs is march 31. Yet, taxpayers begin filing returns, this year, on january 20. This gap in time prevents the irs from conducting validity checks. Legislation would be needed to accelerate the filing of the information returns. The irs has taken steps to effectively prevent the filing of Identity Theft tax returns by locking the tax accounts of deceased individuals to prevent others from filing returns using the departeds name Social Security number. For 2014, the irs rejected over 338,008 file returns and stopped paper returns through the use of these locks. Just 11 days after the Filing Season began, the irs reported that it had prevented the issuan