An e-mail. Weeks of phone calls. A flurry of texts.
All of that was behind us.
Now it was time to meet face-to-face – in a tiny, dark hotel conference room nearly 900 miles from Indianapolis.
One meeting room. Two IRS whistleblowers. Three TV cameras. Hundreds of questions.
The first question seemed obvious.
"Why are you here?" I asked.
The whistleblowers looked at each other and smiled.
"Because I love my country. And I just can't do this no more. It's not right," said one of the IRS workers.
"That's why we're both here," said the other, echoing her colleague with long, deliberate pauses. "It's a crime, and it's…just…not…right."
Together, they have decades of experience at the Internal Revenue Service, working on the front lines with frustrated, angry or confused taxpayers who contact the agency for help.
Risking their jobs to come forward, the whistleblowers do not want to show their identity. But they do want to show how the IRS is a knowing accomplice to millions of cases of identity theft while keeping victims in the dark.
A five-month Eyewitness News investigation shows their concerns are well-documented, and the IRS has been warned about the problem for years. Within a massive federal agency that claims to be taking identity theft seriously, the reality – in many cases – is very different.
"We are not supposed to do anything." said a whistleblower. "We are not allowed to say anything."
Findings of the 13 Investigates report include:
- The IRS accepts millions of tax returns – and issues tax refunds – even when taxpayer documents show clear warning signs of identity theft
- Confidential IRS policies instruct IRS employees not to tell taxpayers when someone else uses their social security number to earn income
- The IRS allows illegal immigrants to "borrow" social security numbers that do not legally belong to them
- The IRS is discontinuing a program to notify taxpayers when their social security number is used by someone else to gain employment
"Let it go"
To understand what the whistleblowers are talking about, you first need to understand some IRS basics. Don’t worry. It will just take a moment to walk you through it.
Everyone who meets minimum income thresholds in the US is required to file a tax return with the IRS.
For undocumented workers – who are also required to submit a tax return despite their illegal immigration status – it means using an individual taxpayer identification number, better known as an ITIN. It is a government-issued ID number granted to undocumented immigrants specifically for tax purposes, and it allows them to not only file taxes, but also to get tax refunds and certain tax credits.
But an ITIN cannot be used to get a job, and undocumented workers cannot legally get a Social Security number which most companies require for employment. Facing that dilemma, many undocumented immigrants figure out how to get a Social Security number anyway -- a number that does not belong to them – simply to get work.
So at tax time, millions of undocumented workers send the IRS their ITIN tax return and, along with it, many send a W-2 that shows the income they earned using somebody else's social security number.
The ID numbers submitted to the IRS – both an ITIN and a Social Security number -- clearly don't match. In fact, the IRS has an official name for that: an ITIN/SSN mismatch. It's a huge warning sign for identity theft.
But amazingly, the IRS accepts millions of ITIN/SSN mismatch tax returns anyway.
The agency actually encourages undocumented immigrants to file with a mismatched Social Security number that does not legally belong to them. The IRS website instructs tax preparers that undocumented workers can and should include on their tax returns any income they’ve earned using a Social Security number -- even though the IRS admits non-resident aliens are not legally eligible to receive a Social Security number in the first place!
So what does the IRS do with that information? What action does the agency take when it learns someone else used your Social Security number to get work and earn a paycheck?
"We're not allowed to say anything. Not a word," explained an IRS whistleblower.
"You were told to ignore it?" I asked, making sure I heard correctly.
"Yes. Identity theft is a crime. It affects real people in a lot of ways. But we are not supposed to do anything. Just let it go," she said. "I talk to these people every day who don't understand exactly what happened to them, and it's heartbreaking."
A surprise in the mailbox
David Burian knew something was wrong the moment he opened the envelope.
"It was from the IRS, and they said I didn't report all of my income," the Fort Wayne businessman explained to 13 Investigates.
On the other side of the state, Alfred Allen received a letter that was nearly identical.
"I saw it was from the IRS, and I thought maybe it was my refund check. But it wasn't. They were telling me I had falsely done my taxes," the teacher explained from his Hobart home.
Both men were accused of under-reporting their income, cheating the government out of money.
In reality, they are victims of identity theft. Undocumented workers got jobs using their Social Security numbers, making it appear Burian and Allen earned more income than they actually had. But the IRS wouldn't explain that to either victim.
"I called [the IRS] and they asked me if I worked for a company in Plainfield that I never heard of before. Then they told me what information I had to send in, but they didn't tell me anything else about what was going on," Burian said.
It took him months to prove to the IRS that the suspicious income was not his.
"I had to make a police report with the city of Fort Wayne. I had to make a police report with the state. I had to get an affidavit and sign that and then send it all to the IRS and wait and see what their response was," Burian explained, sifting through a large file full of correspondence and documentation related to the case. "It was very time consuming."
Allen had to do the same thing, and while he was trying to clear things up with the IRS, he and his family were denied state health insurance because of the mix up.
"I had to go months hoping my kids wouldn't get hurt because they didn't have the insurance," he said. "It was upsetting, a real hassle and kind of scary, really."
Many more victims
Burian and Allen are not alone. Data discovered by 13 Investigates reveals millions of potential victims.
In 2000, undocumented workers submitted an estimated 309,000 ITIN returns with ITIN/SSN mismatches, according to Congressional testimony from the U.S. Treasury Inspector General for Tax Administration (TIGTA).
In less than a decade, that number quadrupled.
A 2010 TIGTA investigation showed 1.2 million undocumented workers cited income earned with another person’s Social Security number when they filed their tax returns in 2007. Those numbers came directly from the IRS records. TIGTA also conducted its own analysis, finding a statistical sample of ITIN tax returns showed 80% of ITIN taxpayers used someone else's Social Security number for employment.
Another TIGTA report found the number of ITIN/SSN mismatches on ITIN returns exceeded 91%.
There are now an estimated 3 million ITIN tax returns filed with the IRS each year.
Nearly eight years ago, Inspector General Russell George issued a warning to the IRS, writing "we are concerned that if the IRS takes no additional action to stop further use of another person's identity, then there is no deterrent to keep the problem from spreading."
The concern and the prediction were accurate. While the IRS has taken aggressive steps to address some types of tax-related identity theft, it has done little -- if anything -- to curb the problem involving illegal immigrants who file ITIN tax returns with the help of someone else’s Social Security number.
“With the employment-related identity theft, they really don't have a process to stop it,” said TIGTA Assistant Inspector General Russ Martin.
His office has been warning the IRS about employment-related identity theft for nearly two decades. One of the warnings included a scathing report, stating “the IRS has no procedures for employees to initiate a process for notifying taxpayers who may be unaware that their Social Security Numbers have been stolen.” That report was issued five years ago, and little has changed.
Facing continued pressure from TIGTA, last year the IRS launched a pilot program to actively notify (for the first time) victims of employment-related identity theft. The trial program has ended and is now being reviewed by both the IRS and TIGTA. Sources close to the program tell 13 Investigates the IRS has decided to stop the notifications due to a lack of funding from Congress. TIGTA remains concerned.
“It is a continued problem for the IRS,” Martin told 13 Investigates. “It affects millions of taxpayers.”
So why is the IRS still looking the other way, allowing millions of people to use Social Security numbers that do not belong them, and essentially facilitating a crime?
“I think you should ask the IRS,” Martin said.
Secret documents
The IRS says it is in the process of making changes in order to give people more information about fraudulent returns filed with their SSN.13 Investigates tried that – repeatedly. For weeks, Eyewitness News asked the IRS for an interview. My cameraman and I even went to the agency's headquarters in Washington, D.C., but the IRS declined to meet with us.
So we looked for answers elsewhere. We found them in what's called the IRM, the official Internal Revenue Manual that serves as the policy bible for IRS employees.
The IRM lives online at the IRS website and it is huge. Printed out, it's more than seven feet high -- more than 21,000 pages -- covering the rules, policies and procedures that govern nearly all activity within the IRS.
Some of the manual is "official use only" meaning it's kept secret from the public. But through internal sources at the IRS, 13 Investigates obtained confidential sections involving employment-related identity theft.
One of the confidential chapters warns IRS employees "Do not disclose to the taxpayer that … their SSN was reported on an ITIN return" and used by someone else to get a job. It instructs IRS workers not to mark the victim's file with a special identity theft code, explaining "Employment related identity theft is not a tax administration issue because the SSN owner's Master File tax account is not affected."
In multiple sections, the IRS manual also suggests employment-related identity theft is of little concern, referring to an undocumented worker who use someone else's Social Security number as a "borrower" who is simply "working under a ‘borrowed' SSN."
