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Washington, D.C.—While the Internal Revenue Service (IRS) has made progress in combating tax refund-related identity theft cases, further gains in this critical area depend on sufficient resources being directed to it, the leader of the union representing IRS employees told a Senate committee today.

Stagnant budgets of recent years, compounded by the cuts mandated under sequestration, have put considerable pressure on the agency’s ability to take further steps in the fight against identity theft, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) told the Senate Special Committee on Aging in submitted testimony today.

“NTEU believes that only through restoring critical funding for effective enforcement and taxpayer service programs can the IRS combat identity theft through fraud prevention and victim assistance, and maximize revenue collection that is critical to reducing the federal deficit,” she said.

Theft of a taxpayer’s identity in hopes of generating a fraudulent refund is a fast-growing crime; the IRS has some 650,000 active identity theft cases.

Despite the adverse budget climate, the IRS has sought in recent years to make investigating identity theft a priority goal. Under a multiple-part strategy, Kelley told the committee, the agency has provided a variety of assistance to identity theft victims, including issuing special identification numbers to more than 250,000 taxpayers as an aid to securing an appropriate refund; begun civil and criminal recourse resulting in 939 identity theft criminal charges; and created an identity theft clearinghouse to refer such schemes for investigation. Moreover, it has prevented some $1.85 billion in fraudulent refunds from being sent to identity thieves.

“The IRS has made progress on this issue,” Kelley said. “They can do more, but only if they are provided the necessary resources.”

More broadly, she told the committee that sequestration cuts to operating expenses, along with the potential furlough of IRS employees of between 5 and 7 days, will have serious negative impacts on a wide range of taxpayers—small business owners; those needing help ranging from a simple question to more complex tax matters; low-income taxpayers; non-English speakers; those filing an amended return and seeking a refund; and the many taxpayers who count on receiving their refund in a timely fashion.

“There is no upside to budget cuts and sequestration at the IRS,” President Kelley said. “A hiring freeze, cuts in programs, insufficient staffing, long waits for taxpayers, less enforcement, less educational efforts leading to less voluntary compliance with tax obligations—all of it adds up to serious problems for our country.”

To emphasize the point, she noted the IRS collects 93 percent of all federal government revenue. “Without it, we jeopardize our security, the safety of our food, air and water, and all the other vital services provided by federal agencies,” Kelley said. “This is a path we should not be traveling.”

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.