Obviously, the IRS needs to refine its practices. The Stopping Tax Offenders and Prosecuting (STOP) Identity Theft Act is aimed right at the scammers. The bill increases penalties for identity theft, and when committed in conjunction with tax fraud, creates a compound offense, increasing prison sentences even further.
The bill also expands the definition of "identity" beyond the traditional, flawed constraints like name, address and Social Security number. These days virtually anything — your location as you use the Internet, your email password, your Twitter and Facebook account names — can be used to steal your identity and with that, your tax return or anything else that can be had if you have the keys to an individual's finances.
Broadening the definition of "means of identification" to include any name or number used to identify a person is a huge, wonderful step in the right direction. The fact that such a definition was included in the original version of the bill, without months of lobbying by identity theft and consumer experts, shows that some members of Congress are finally learning the hard truths about what identity theft is, how it's perpetrated, and the harm it can cause. And now they finally comprehend that on a yearly basis identity thieves are stealing enough money to keep the military health system running for six months. Does the STOP Identity Theft Act entirely fix the problem? While I'm an optimist, I'm not a Cubs fan — of course not. Identity theft is so pervasive, and it happens for so many reasons, that a narrow bill focused primarily on protecting the nation's treasury will never be the kind of broad, all-encompassing law needed to tackle the problem. Prison sentences must be lengthened for all types of identity thieves, not just those who use stolen data to commit tax fraud.
The STOP Identity Theft Act is a good first step. It shows that at least members of Congress are willing to put consumers and privacy ahead of short-term political advantage. These thieves are cyclically robbing the nation of ten years' worth of funding for federal weather satellites (that's #7 — I knew I had one more in me), not to mention the consumer spending that isn't happening that isn't spurring production that isn't creating jobs. Maybe our legislative leaders have finally realized seriousness of the identity theft problem. That the STOP Act essentially sailed through the House, with neither side trying to politicize what is essentially a nonpartisan issue, demonstrates that Congress is still capable of doing its most important job: coming together to protect Americans from a clear and present danger.
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.