There are a number of reasons people find themselves considering bankruptcy. For some, it boils down to unexpected expenses or just poor decision-making. Every situation is difficult, but there is something especially hard when you are on the hook for debt that isn't yours. Identity theft has sent more than a few people into bankruptcy.
It is almost impossible to go through the day without hearing something about identity theft. A retailer announced a data breach. Television ads tell us about companies that can help us short circuit identity theft or clean up the mess left after someone's personal information has been compromised. The IRS issues warnings about scams used to gather credit card and social security numbers from consumers. We receive constant reminders of the risks involved with sharing information over the phone or even in writing.
And yet one of the worst offenders putting our identities at risk is the Internal Revenue Service itself. The Office of Management and Budget had issued a mandate that the IRS eliminate the use -- the unnecessary use -- of personally identifiable information in forms, letters and notices to taxpayers, setting the deadline as 2009. (FYI: Personally identifiable information is referred to as PII in government documents.) In a report released over the summer, the Treasury Inspector General for Tax Administration confirmed that the IRS still has a good way to go to achieve that objective.
The sheer volume of correspondence is a little overwhelming, not to mention the idea of figuring out which kinds of letters and notices include PII. Surely the IRS has that information at its fingertips, right?
The IRS sends out 2,749 types of letters and 195 types of notices that include PII. At the beginning of 2015, that information had been removed from just 2 percent of the letters and 48 percent of the notices. Considering the volume of correspondence mailed in 2014 alone -- by the agency's conservative estimate, it sent out 37 million letters and 141 million notices -- it is clear that a huge number of taxpayers are at risk of having their Social Security numbers compromised.
It won't surprise anyone to hear that funding cutbacks have back-burnered the agency's efforts to meet the OMB mandate. There have been other stumbling blocks as well.
We'll explain more in our next post.