The IRS’ criminal investigation division has kept itself very busy with refund fraud cases in recent years. They would love to be able to enlist the cooperation of local law enforcement but have always been prohibited from sharing some of the information necessary to apprehend tax criminals. Individual tax return information, for instance, has always been kept strictly confidential under long-standing IRS rules. In fact, it is a crime for IRS workers to share this sensitive information outside the context of their work. Believe me, they are very cautious with this data, even in standard tax resolution inquiries.
However, under a pilot program that will be initiated in Tampa, Florida, the IRS will begin sharing some tax return information to local police, so long as the victims of identity theft and tax refund fraud give their consent. There is no start date yet.
Surprisingly, National Taxpayer Advocate, Nina Olson, is not opposed to this new legislation, as long as the information shared with police is used strictly for law enforcement purposes.