Tax Talk: On the lookout for fraudulent returns

February 20, 2017|

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The IRS has implemented new safeguards in an effort to help reduce the number of fraudulent returns that are filed electronically. Its goal is to verify the taxpayer’s identity and the validity of tax returns before the return is accepted for processing. The IRS has been working with state agencies and the tax industry to strengthen safeguards that protect taxpayers from identity theft. The 2017 safeguards are aimed at those of you who prepare your own federal and state tax returns using tax software.

  • The IRS, states and the tax industry will be sharing and analyzing data that will help us spot identity theft returns.
  • There are multiple safeguards in place that don’t require you to do anything. We will do it all behind the scenes.
  • You might experience some minor inconvenience in the way of an additional step or two, which are for your protection. For example, some of you might have to enter a 16-character code found on your Form W-2. This helps us verify the accuracy of the information. Or those of you using a software product for the first time will need your 2015 adjusted gross income to complete the electronic filing process.
  • A new law passed by Congress requires the IRS to hold any refund claiming the Earned Income Tax Credit or Additional Child Tax Credit until Feb.15. This is to give the IRS time to verify the accuracy of the return. Please note that because of the time it takes refunds to work through banking and financial institutions, in addition to weekends and holidays, people with these credits might not see their refunds until the week of Feb. 27.
  • Some states might ask for driver’s license numbers as an additional authentication step. If you do not have a driver’s license, a state identification card or passport will do.

If you use a tax preparer, be sure to provide a copy of your driver’s license (or other ID) for verification, even if you have been using that tax preparer for years. As taxpayers, we understand this is an inconvenience, but as tax preparers, we understand it is well worth the inconvenience to help put a stop to the $5.8 billion in fraudulent claims that were filed between 2001 and 2014 — a pure waste of taxpayer money!

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